India: Jabong in talks with Snapdeal for stake sale

Visual from the company website. September 2015

Jabong, owned by Global Fashion Group (GFG), has had problems riding the e-commerce growth wave. It’s co-founder Arun Chandra Mohan quit earlier this month and Praveen Sinha, the other co-founder is also said to be on his way out. On top of that, the company posted a loss of Rs 454 crore in the year ended December 31, 2014, although all of its peers are also in the red.

With not much going for it, GFG has been looking for a buyer and has approached Snapdeal, which is much bigger in terms of gross merchandise value and is backed by Alibaba and SoftBank.

Kunal Bahl, CEO and co-founder, did not rule out his interest. “At any time, anyone who wants to look at raising money in this market, or is thinking about getting a strategic partner on board, comes and talks to us,” he said in this report.

Jabong’s strength lies in its fashion offerings, and this is a segment that Snapdeal lacks. If the acquisition happens, Snapdeal will have more firepower in competing with Flipkart-owned Myntra.

Jabong has reportedly been in talks for a possible sale with Amazon India and Paytm, but they fell through ostensibly after Global Fashion Group (GFG), the owner of Jabong, asked for a higher valuation.

Rocket Internet and Swedish Investment AB Kinnevik currently hold 21.9 per cent and 25 per cent stake respectively in GFG. The group, formed last year after combining five of Rocket’s fashion-focussed e-commerce companies, currently operates across four continents and 27 countries and employs over 9,500 people

Nils Chrestin, GFG’s London-based chief operating officer, has been a frequent visitor to India to manage Jabong’s daily operations after Mohan quit.

 

Also read:

Global Fashion Group’s Nils Chrestin to spearhead Jabong as founders leave

Indian e-tailer Snapdeal hires former Twitter executive Rahul Ganjoo

Jabong owner in initial talks with Paytm, others to sell online retailer for upto $800m

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.