Rocket Internet has secured new funding for two of its fashion-focused ecommerce startups, with a €10M investment for Lamoda, which operates predominantly in Russia and Kazakhstan, and €15M in equity investment for LatAm’s Dafiti (active in Brazil, Argentina, Chile, Colombia, and Mexico).
The target market of these startups is key to this funding being as it’s coming from the World Bank Group’s IFC investment arm: a global development institution which focuses on the private sector, using funding investments with the aim of helping to eliminate extreme poverty and promote shared prosperity.
That’s right, Rocket Internet is attracting funding for being an engine of economic development and job creation in emerging regions of the globe — which is rather at odds with the negative tone of some of the press the Samwer brothers’ business efforts tend to attract (whether it’s for cloning, or for its own charged working environment that apparently fuels high staff churn rates).
Also giving pause for thought: a World Bank Group poverty-alleviating institution sharing investor status with the likes of JP Morgan (JP Morgan invested in Lamoda in 2012, and also previously put $45M into Dafiti). Or not. Wealth creation has many parents (and, er, foster parents).
In a press release announcing the funding, the IFC notes that both the Rocket Internet businesses employ thousands of people in Latin America and the CIS region — with over two-thirds of them being women. (Lamoda alone employs more than 2,000 people, while Dafiti employs 1,500+ just in Brazil.)
It also flags up the two startups’ indirect support of additional jobs in logistics, IT and by “facilitating demand for locally sourced goods”.
“Internet companies are speeding up modernization of the retail supply chain in developing countries, which promotes consumer spending—a key component of economic growth,” said Atul Mehta, IFC Global Director for Manufacturing, Agribusiness, and Services, in a statement. “Their investments in logistics, information technology and marketing are rapidly generating employment, especially for women and young people.”
The IFC’s fiscal year 2013 investments apparently hit an all-time high of nearly $25 billion — with some $600 million of that going towards the retail sector — making today’s cash injections into Rocket’s fashion ecommerce sites something of pocket change for the organisation.
The Dafiti investment is also relatively incremental for that business. In three years the Dafiti Group has pulled in some $275 million in funding from investors, including anchor investor, Investment AB Kinnevik, as well as the aforementioned JP Morgan, plus Quadrant Capital Advisors and Teachers’ (OTPP).
Lamoda’s existing investors are named as Investment AB Kinnevik, Access Industries, JP Morgan, Summit Partners and Tengelmann. Its total funding raised to date is listed as $130 million, according to Crunchbase.
The IFC said its investments in Dafiti and Lamoda will go towards supporting business expansion and raising environmental, social, and corporate governance standards, and strengthening competitiveness through reduced operating costs and enhanced efficiency.