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Rocket Internet-Backed Online Fashion Store Bought for $70 Million by India’s Flipkart

Rocket Internet-Backed Online Fashion Store Bought for $70 Million by India’s Flipkart
In a move that will mark further consolidation in India’s booming e-commerce industry Flipkart-owned Myntra today said it has acquired Jabong from Global Fashion Group for an undisclosed amount.
From the deal, a combined base of 15 million monthly active users would be available to Myntra which itself was acquired by Flipkart in 2014 in an estimated Rs. 2,000 crore deal.
“The acquisition of Jabong further strengthens Flipkart Group’s position as the undisputed leader in Fashion and Lifestyle segment in India. Jabong is among India’s major fashion multi-brand e-store with more than 1,500 on-trend international high-street brands, sports labels, Indian ethnic and designer labels and over 1,50,000 styles from over a thousand sellers,” Myntra said in a statement.
Dorothy Perkins, Topshop, Tom Tailor, G Raw Star, Bugatti Shoes, The North Face, Forever 21, Swarovski, Timberland and Lacoste would be some of the global brands that will be exclusive to both the platforms.
“Fashion and lifestyle is one of the biggest drivers of ecommerce growth in India. We have always believed in fashion and lifestyle segment and Myntra’s strong performance has reinforced this faith,” Flipkart CEO and co-founder Binny Bansal said.
He added that a continuation of the group’s journey to transform commerce in India is marked by this acquisition.
“The acquisition of Jabong is a natural step in our journey to be India’s largest fashion platform. We see significant synergies between the two companies especially on brand relationships and consumer experience. We look forward to working with the talented Jabong team to shape the future of fashion and lifestyle ecommerce in India,” Myntra CEO Ananth Narayanan said.
Companies including Future Group, Snapdeal and Aditya Birla-owned Abof among others were in discussions with Jabong which has been in the market for a sell-off.
Jabong was merged with four other online fashion retailers in Latin America, Russia, the Middle East, South-east Asia and Australia to create Global Fashion Group (GFG) by its investor in 2014 after it was founded as early as 2012.
a large stake in Jabong’s parent Global Fashion Group is owned by Swedish investment firm Kinnevik.
Both Kinnevik and Rocket Internet seem unwilling to infuse fresh capital and are believed to be keen to exit while Jabong has managed to reduce losses by reducing discounts.
Raising 300 million euros from Rocket Internet and Kinnevik, GFG raised fresh funding from existing investors at a lower valuation in April this year.

Noting a significant fall from earlier valuation of 3.1 billion euros, post the last round, GFG was valued at 1 billion euros.
Moving from Rs. 24,046 crore to Rs. 37,689 crore between the December 2014 and December 2015, e-tailing has grown at 57 per cent year-on-year according to the Internet and Mobile Association of India.
While the revenues for Jabong were at 122.1 million euros for FY 2015, it had a net revenue of 32.6 million euros in Q1 2016, up 14 per cent from 28.6 million euros in the year-ago period as per a Rocket Internet investor presentation.
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Christopher J. Mitchell

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