Global Fashion Group has seen its valuation more than halved by Rocket Internet, owner of about 23 percent of the eCommerce company. Valued at around $3.1 billion a year ago, GFC is now valued at around $1.1 billion.
eCommerce fashion, once a lagging area of online sales, has recently become a very hot and very competitive battleground for up-and-coming players. Amazon Fashion is making a hard press in Europe, and GFC is struggling to find the right competitive special sauce.
“We’re excellently positioned in countries and regions where you see a massive shift from offline to online,” Global Fashion Group CEO Romain Voog said in a phone interview with Internet Retailer.
“We want to have a very clear path on becoming a profitable company,” he noted on his lack of concern about the down round.
Zalando is GFC’s biggest and best-known brand that serves Europe, though the firm is also behind Dafiti in South America, Jabong in India, Namshi in the Middle East, Russia’s Lamoda, Zalora in Southeast Asia and The Iconic in Australia.
Global Fashion Group, which is raising at least 300 million euros ($339.6 million) in its latest round, plans to use the funding to invest in brands, mobile technology and last-mile delivery to grow sales in its existing markets and further improve profitability.
The downgrade — apart from marking some trouble for GCF — is a sign of worry for Rocket, which is under pressure to show investments paying off. Rocket CEO Oliver Samwer noted earlier this month that last year many of their startups were in growth mode — and this this year should show “significant” improvements in profitability.