German company builder Rocket Internet is teaming up new and existing investors in a $100m funding boost for Lazada, its online mall in South East Asia. The news comes as rivals Amazon and Rakuten make new plays of their own for the fast-growing region.
The new funding round, announced today, is led by Belgian family-owned investment group Verlinvest – a new investor for the Samwer brothers’ Rocket Internet – with participation from existing investors Holtzbrinck Ventures, Kinnevik, Summit Partners and Tengelmann Group.
South East Asia, home to about 600 million people, is still a relatively untapped market for eCommerce. Logistics – shipping goods across Indonesia’s thousands of islands, for example – and relatively low credit card penetration pose challenges; a rising internet-savvy middle class implies efforts will pay off.
Lazada, founded in 2012 by prolific and aggressive company builder Rocket Internet and currently employing about 1000 people, sells consumer electronics, household goods, toys and sports equipment in Indonesia, Malaysia, Philippines, Thailand and Vietnam. The company recently passed its one-millionth order milestone.
“Given the management’s track record and the region’s macro outlook we are very confident in Lazada’s future,” Verlinvest Chairman Frédéric de Mevius said in a press statement.
Lazada will use the new funds to further develop its shipping capabilities. It’s also working to bring out a new iOS app to join the existing Android version – an important part of its offer in a region where many potential customers only have access to the internet through smartphones.
While Lazada enjoys an early-mover advantage in South East Asia, it’ll need to work hard to maintain it. As well as local rivals and the ubiquitous eBay, Amazon is now offering free shipping from the US to Singapore and India – other parts of South East Asia could be next. In November 2012, Japanese online giant Rakuten set up shop in Malaysia, its first foray into the region without a local partner.