Global Fashion Group (GFG), the parent company of the loss-making online retailer Jabong, has secured funding of 300 million euros from Rocket Internet and Investment AB Kinnevik, according to a press release from the company.
How much of this infusion is into Jabong was not immediately known. Jabong reported an operating loss of Rs 426 crore in FY15, slightly lower than in FY14. The revenue growth in FY15 inched up by just 7% to Rs 866 crore from R811 crore in the previous year.
The fashion portal according to media reports, has been unable to find buyer even at valuation of $100 million.
In 2014, Amazon reportedly wanted to acquire Jabong but the price tag was a steep $1.2 billion. The funding comes at a time when the company is transforming itself into a marketplace from being inventory-led player in a bid to cut costs.
According to a report by Rocket Internet, Jabong is the only loss-making outfit in GFG’s portfolio of ten companies in the January-June 2015 period. Jabong also registered slowest revenue growth of 26.5% y-o-y in the six months to June, 2015 among the ten companies.
In December, former Benetton India MD Mohanty took charge of the company when Jabong’s founder Praveen Sinha and Arun Chandra Mohan exited the company.
In February, former eBay India head Muralikrishnan B joined as chief operating officer while Saurabh Srivastava, chief marketing officer stepped down from the position just five months into his appointment.
Sanjeev Mohanty, MD and CEO, Jabong said the funding will help the firm enhance its business operations. Recently, Rocket Internet sold its online furniture company FabFurnish to Kishore Biyani’s Future Retail, at a valution of Rs11 crore. Foodpanda, food ordering and delivery platform backed by Rocket Internet is also believed to be on the block, according to media reports.
