Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on T Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on Twitter, Angel List, LinkedIn.
Rocket Internet-backed Lamoda, a fashion-focused e-commerce site in Russia, has announced that it has landed a $130 million (RUB 4.2 billion) round of funding from a range of regular Rocket Internet co-investors: Access Industries, Summit Partners and Tengelmann Group.
Lamoda calls the deal “the largest investment ever made in Russian e-commerce” and it follows a similarly significant windfall for Zalora, Lamoda’s sister site in Southeast Asia, which raised $100 million in March. Zalora’s raise included capital from Summit Partners and Tengelmann Group too.
Founded in 2011, Lamoda claims to see more than 20 million monthly visitors across its two Russian sites, which it says offer more than 1 million products from some 800 international fashion brands. Like Zalora, the site is aiming to bring quality e-commerce services to Russia, a market that has been under-serviced by the likes of Amazon, eBay and others thus far. (Although competition is heating up since Amazon just arrived in Russia and top local retailer Ozon booked $232 million in sales in the past six months.)
The company says it already provides next-day delivery to more than ten cities in Russia, and this new investment will increase its focus on raising the level of service and products available in more cities, according to co-founder and CEO Niels Tonsen:
“The investment allows us to continue building out our position as the leading fashion e-commerce retailer in Russia and the CIS. We are focused on offering the best possible customer experience paired with a unique product offering of local and international brands. With Lamoda Express we are already serving important parts of Russia with next day delivery. We will use the new investment proceeds to make this unique value proposition available to ever increasing numbers of our clients this year and beyond.”
Rocket Internet got a reputation for creating ‘copycats’ of successful business models with a view to making a quick buck through acquisitions — such as CityDeal which sold to Groupon for $126 million — but, as the recent funding deals show, the notorious German incubator is changing its approach with the emerging market businesses.
As Zalora Managing Director Michele Ferrario told TNW in a recent interview, a number of Rocket Internet-backed companies are aiming to build industry leading e-commerce firms in emerging markets like Southeast Asia, Latin America and Russia. That necessitates a long-term plan, plenty of investment and input from a range of experienced backers — such as proven retail groups like Tengelmann.
These companies aren’t without their problems — demanding work schedules and a lack of equity are viewed as key factors for high turnover rates among staff — but Rocket Internet and its investors are putting huge resources into bringing a new level of services to these markets, and that shouldn’t necessarily be dismissed as copycatting.
Also read: Russian ecommerce is reaching a tipping point. It’s time that Europe and the US took note
Headline image via 401(K) 2013 / Flickr
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