Rocket Internet invests 300 million Euros in Jabong’s parent company GFG

Berlin-headquartered company Rocket Internet has invested a funding of 300 million euros (about Rs 2,282 crore) in Global Fashion Group (GFG), the parent company of online fashion portal Jabong.

The German start-up investor will underwrite around 100 million euros (about Rs 760.7 crore), and will invest around 85 million euros (about Rs 646.7 crore), which would include the conversion of an existing investment at the terms of the financing.

For this transaction, GFG was valued at 1 billion euros post the transactions, said a Rocket Internet statement.

"The financing will provide GFG with the necessary capital to continue to execute its strategy of building out its leading position in the online fashion sector in emerging markets," GFG Chief Executive Officer Romain Voog said.

In the first quarter of 2016, GFG has meaningfully reduced losses from operations as compared to period a year ago, which has very well resulted in it seeing an improvement of the adjusted EBITDA margin by over 10 percentage points.

"This is in line with GFG's plan to deliver an accelerated path to profitability across its regional businesses while continuing to capture the significant market opportunity available," Voog said.

Also read: Investors unwilling to buy Jabong for $500mn, say it's worth only half as much!

GFG, which was founded in 2014, combines six regional brands all across the world, viz. Dafiti in Latin America, Lamoda in Russia and CIS, Namshi in the Middle East, The Iconic in Australia, Jabong in India and Zalora in South-East Asia.

"We continue to be very excited about the prospects of GFG, which has successfully built out leading market positions in key emerging markets. We are looking forward to continuing to work with the GFG team as well as Kinnevik and the other GFG shareholders to support GFG," Rocket Internet CEO Oliver Samwer said.

Sanjeev Mohanty, MD and CEO of Jabong, said that the funding will help the firm enhance its business operations.

"We have had success over the past few months, with Jabong recently recording its best month in terms of revenue... GFG sees good progress with Jabong in India and this trust will help us strengthen our operations in the country," he added.

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