Kinnevik looks to increase investments in India

Swedish investor Investment AB Kinnevik is looking to expand its investments in India by three to four times over the next four years, the Mint newspaper reported, citing CEO Lorenzo Grabau.

Kinnevik, which has $6.09 billion assets under management, plans to raise its investment in India to eight to 10 per cent of its corpus from two to three per cent now. The move comes despite the fact that some of its portfolio companies in India are not performing well.

It is the largest shareholder of Global Fashion Group (GFG), the company that owns fashion e-tailer Besides, it owns a stake in online classifieds portal Quikr and online furniture store Fabfurnish.

Kinnevik, one of the largest investors in Germany’s Rocket Internet, is looking for a partner for its investment in Fabfurnish, Grabau said in the report. The furniture seller decided to change its business model to become a full-fledged marketplace instead of selling private labels.

“When our companies are not doing very well or if the market is too competitive we look for ways to combine businesses and that’s helpful because it reduces competition and it makes for stronger businesses,” Grabau said. He added that Kinnevik would make an announcement on Fabfurnish in the next few weeks.

Kinnevik is also looking to augment Jabong’s platform and acquire companies operating in online fashion niches. Jabong competes with Flipkart-owned Myntra and other horizontal and lifestyle e-commerce players, and has become the top money losing initiative for the company in the country.

“Jabong has a great opportunity and given the size of the Indian market we might need partners to make it stronger. We suspect over the next two or three years we will continue to raise capital at Jabong and at our other e-commerce companies so that we have other sustainable franchise,” Grabau said.

Jabong’s performance in recent months is nothing much to write about. In the third quarter ended September 30, 2015, the number of orders and transactions remained flat over the year-earlier period. Although it managed to pull up its socks in the quarter ended September 30 with sequential growth after seeing a decline in number of orders in the second quarter, at 1.6 million (or around 17,400 orders a day), it just managed to match the previous year’s level.

Jabong has been on the radar of other e-commerce companies. In November 2014, as first reported by VCCircle, e-commerce giant, Inc was in talks to acquire Jabong where the asking valuation was $1.1-1.2 billion. The deal was called off due to a mismatch in valuation by Amazon and Jabong’s shareholders.

Last year, the Swedish firm exited its investment in food-ordering startup Foodpanda, which is owned and operated by Pisces eServices Pvt Ltd. 

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