The Samwer brothers’ Swedish backer Kinnevik spent €300 million on Rocket Internet last quarter, with the bulk going to online retailers Zalando, Dafiti, Lamoda and Namshi.
In its 2012 Q1 results, Kinnevik reports a 2.7 billion (€300 million) investment in Rocket Internet and portfolio companies over the last three months, about the same (€305 million) as it invested across 2011.
Most of this year’s first quarter spending went to online fashion retailers Zalando (Europe), Dafiti (Argentina, Brazil, Chile and Colombia), Lamoda (Russia) and Namshi (Middle East and North Africa), all clones of US based Zappos.
Zalando recently announced an extra €70 million investment to extend its planned logistics centre at Erfurt, Germany. The retailer is planning expansion into several other European countries later this year, starting with Scandinavia in May.
Kinnevik, as a 25 per cent shareholder in Rocket Internet, is also an investor in Home24, Wimdu, Glossybox, Pinspire and troubled company Groupon, through Groupon’s acquisition of Rocket’s MyCityDeal in 2010, among others.
Worth the cost – and the risk?
Rocket’s flagship fashion retailer Zalando reported an operating loss last year due to “strong growth and geographical expansion”, despite growth in net sales from €159 million in 2010 to €200 million in the first half of 2011.
Kinnevik gives a nod in its report to “capital-intensive” expansion and tough competition in the online space. The firm maintains investing in models with a proven ability to capitalise as households spend more time and budget online will be worth it.
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Image credit: flickr user jurvetson