South Africa’s largest fashion ecommerce retailer, Rocket Internet-backed Zando, has today announced a substantial €20 million investment by Summit Partners. Just one month after JP Morgan invested in the online store, the company continues to grow, with over 200 employees and profit margins of up to 50 per cent before tax – as Managing Director and cofounder Manuel Koser told South Africa’s Business Day.
In their first publicly announced investment in a Rocket Internet business, growth equity investor Summit Partners will be taking a stake in Zando through their German holding company. Head of Summit Partners London office, Scott Collins, said in the press release: “We seek to invest in companies that build long-term value, and Zando has shown dynamic growth in a short period of time.” Notable investments from the US-based fund include Answers.com, Winshuttle and Telerik.
Zalando becomes Zando as Rocket branches out into South Africa – the next eCommerce frontier?
Launched in January 2012 by cofounders Koser and Peter Allerstorfer, the Rocket Internet portfolio company Zando has since grown to offer over 400 brands and 10,000 products, making it one of the top five ecommerce websites in South Africa. The business is targeting the growing ecommerce market in South Africa, where internet penetration is forecast to reach 20 per cent by 2013.
Both the business and investors are interested in turning this into a profit, with Koser saying “We are excited to be joined by an investor that shares our vision and belief in the huge potential for the South African market. With the ubiquitous convergence of technologies, feature phones, smartphones, tablets and desktops with dedicated connectivity, internet accessibility is maturing.”
The Zalando imitation offers similar conditions to its European counterpart: free deliveries and returns, along with local and international brands. Its Berlin-based incubator, Rocket Internet, now has over 100 portfolio businesses in 40 countries. Founded by the three Samwer brothers, Rocket Internet is known for launching copy-cat companies in new markets.
By introducing a new investor into the Rocket Internet fold, Oliver Samwer is standing by the claims he made this month at IdeaLab!, where he said he had raised half a billion euros this year and plans on increasing this to three quarters of a billion by the end of the year. Rather than just relying on their staple investors AB Kinnevik and Holtzbrinck Ventures, it looks like there will be more investors helping Rocket Internet reach their target.
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