Samwer Brothers’ Zappos Clone Namshi Gets $13M More From Summit To Build Out Its Middle East Fashion E-Commerce Portal

Posted: May 13, 2013 in eCommerce, Europe, Funding & Exits, GT, Technology
Tags: , , , ,

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Rocket Internet, the German-based e-commerce
startup incubator from the Samwer brothers, is today
announcing another round of funding for its strategy to
build out its footprint into emerging markets. Today
it’s the turn of Middle-East-based fashion commerce
site Namshi, which is getting $13 million from Summit Partners. This is the second time Summit, a Rocket
regular, has invested in Namshi, after a $1 million
injection in January. To date, Dubai-based Namshi
appears to have raised some $34 million, if you also
count the reported $20 million from JP Morgan and
Blakeney Management in September 2012. A Rocket Internet spokesperson would not confirm any of the
sums apart from the most recent one, except to note
that previous funding totals a “high double-digit
amount.” Namshi has been around since 2012 and currently
sells products in six places — United Arab Emirates,
Saudi Arabia, Qatar, Kuwait, Oman and Bahrain. As
with Amazon-owned Zappos, Namshi sells shoes and
other fashion — some 550 brands in all, including
well-known labels like Nike, Lacoste, Polo Ralph Lauren and Puma. The official release from Rocket Internet notes that
this will be used to “sustain its accelerated growth
target,” although what that target is does not get
specified. Namshi also notes that this will be used to
improve the company’s fulfilment operations, moving
stock to a new centralized Namshi warehouse and distribution center, away from the shared space with
Aramex it currently uses. “We see our partners’ growing support as an
encouragement for us to continue serving our
customers with world-class products and services,”
said Hosam Arab, co-founder and Managing Director
of Namshi, in a statement. “Our customers made the
company what it is today. Therefore, they will be the ones to see the main benefits coming from this
investment. We will further focus on providing a
shopping experience like no other in the region.” Part of Rocket’s pressure to expand comes from
other competition on the ground from companies like
Souq, another Dubai-based e-commerce operation.
Like Namshi, Souq is riding a wave of fast internet
growth in emerging markets at a time when more
mature/developed regions like the U.S. are slowing down due to saturation. It also comes at a time when Amazon itself appears
to be getting more international in its ambitions for
both its own brand and those that it owns, also
tapping into these emerging market trends. One
recent example: Amazon apparently staffing up for a
bigger push into Russia with its Kindle services, which comes alongside resources also being put into
a Russian expansion for fashion portal Shopbop. International expansion makes sense for Amazon,
which sells products at narrow margins and makes up
for that with economies of scale. Given Rocket’s exit
track record — selling portfolio companies to the likes
of Groupon and eBay to aid in those giants’
international growth plans — it looks like one idea is for these startups to position themselves as
acquisition targets for their U.S. counterparts. But, at
the same time, Rocket is also building out
businesses that follow that model and grow in their
own right. Rocket Internet often rolls out multiple
startups in the same region, and the idea is for these to use the same back-end systems, fulfillment
operations, customer support and sales, and more to
achieve their own economies of scale. Developing markets have been a big target for Rocket
Internet, with operations in Africa, Asia and Latin
America in fact outnumbering those in Europe. And
Summit has been no stranger to helping fund a
number of these, including a recent $26 million for
Lazada in Asia; $26.5 million in Linio (the “Amazon of South America”, which is funny since the Amazon
runs through South America already); and $26 million
in Jumia, another Amazon clone, this time in Africa. “Namshi and its management team have done an
exceptional job of growing the company, and we are
happy to support the company’s continued
expansion,” said Scott Collins, an MD and head of the
Summit Partners London office, in a statement.

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