 "Rocket Internet writes down valuation of Global Fashion Group by two-third")
German internet firm Rocket Internet has written down the valuation of Global Fashion Group by 68 per cent, from EUR 3.1 billion in July 2015 to EUR 1 billion today, when it announced a $330 million fund raise by the fashion group.
Today's transaction values GFG at EUR 1.0 billion post the investment. In July 2015, the Global Fashion Group had raised $150 million on a post-money valuation of EUR 3.1 billion, German firm had said in a statement.
Fashion retailer Jabong.com is part of this group, which Rocket is planning to sell, according to media reports. A write down in valuation of its fashion business will enable prospective suitors to bargain harder with Rocket for Jabong.
In 2014, Rocket Internet created Global Fashion Group (GFG) to bring all its online fashion businesses in emerging markets under one roof. It combines six regional online fashion businesses, Dafiti in Latin America, Lamoda in Russia and GUS, Namshi in the Middle East, The Iconic in Australia, Jabong in India and Zalora in South-East Asia.
On Friday, Rocket announced that GFG had raised of EUR 330 million from existing investors including Rocket Internet SE (Rocket Internet) and the Rocket Internet Capital Partners fund (RICP). The initial underwritten minimum capital raising of EUR 300 million was increased to EUR 330 million.
Rocket Internet has invested EUR 68 million including the conversion of an investment in a previous financing round and excluding any commitment from RICP. Its direct and indirect stake after the transaction will be 20.4%.
"GFG has successfully built its position as market leader in online Fashion in many key emerging markets", says Oliver Samwer, CEO of Rocket Internet. "The recent funding round provides GFG with the necessary capital to continue on that path. We are looking forward to continuing to work with the GFG team as well as Kinnevik and the other GFG shareholders."