Mar 3, 2016
Jabong gets $20 mn lifeline from GFG
Mar 3, 2016
"The board has agreed to put more than $20 million in Jabong," The Economic Times quoted an unnamed source who participated in the meeting held in Luxembourg recently as saying.
GFG, founded in 2011 by Swedish Investment AB Kinnevik and German Rocket Internet SE, operates ecommerce ventures Dafiti in Latin America, Lamoda in Russia and the CIS, Namshi in the Middle East, Zalora in Southeast Asia and Australia and Jabong in India.
While Oliver Samwer, CEO of Rocket Internet and deputy chairman at GFG, was said to be not in favour of continuing the India venture, Kinnevik insisted on staying put and the board eventually agreed to back Jabong.
Jabong recently sent out a comprehensively drafted press note, claiming that January had been the best ever sales month for the company with the lowest cash burn in 24 months.
CEO Sanjeev Mohanty had also mentioned that $66 million worth of GMV was achieved in January alone, thus encouraging the company to set a daunting, $1 billion GMV target. He also talked about achieving a possible breakeven. The company had an extremely impressive 98 per cent growth in the 2014-2015 period and its losses had shrunk to almost 40 per cent lesser than rivals.
All these combined, could be the reason for an extra cash injection so as to help the company achieve breakeven and ultimately become self-sustainable.
There have been reports that Rocket Internet has been in talks with top e-commerce companies including Amazon, Paytm and Snapdeal to sell Xerion Retail, the unit that operates Jabong. Xerion Retail crossed the Rs 1,000 crore sales mark in the year ended March 2015 as its net loss widened to Rs 43.6 crore from Rs 16.6 crore a year earlier.
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