Kinnevik acquires extra 10 per cent of Zalando for €287m

Nina Fowler 2012-10-18 5

Investment AB Kinnevik

Swedish investment bank AB Kinnevik has stepped up to become Zalando’s largest owner – acquiring another 10 per cent equity for €287m, purchased from fellow investors Holtzbrinck Ventures, Tengelmann and Rocket Internet. The move, announced today, comes as Zalando reports sales of €471m for the first half of this year and expectations of over a billion euros in turnover by the end of 2012.

Robert Gentz and David Schneider founded Zalando in 2008 in partnership with Berlin-headquartered incubator Rocket Internet. Since then, the online shoes and fashion retailer has grown from its base in Berlin to span 14  European markets.

Fast growth comes at a cost – the company reported €510m turnover in 2011 but posted an operating loss that year citing “strong growth and geographical expansion”. Today, Zalando said it was on track to double 2011′s annual turnover figure this year.

The move announced today takes Kinnevik’s stake in Zalando to 26 per cent directly plus another nine per cent indirectly through Rocket Internet (where Kinnevik is a major investor). Together, Holtzbrinck Ventures, Tengelmann and Rocket Internet still hold more than 56 per cent of Zalando.

Both Kinnevik and Zalando, in today’s releases, described the company as well-financed to continue its growth – as well as raising funds from investors DST Global and JP Morgan this year, Zalando raised €40.7m in debt financing from German banks earlier this month.

“Kinnevik first invested into Zalando in 2009 and we have followed the rapid success of the company since then,” Kinnevik CEO Mia Brunell Livfors (above left) said. “We are very pleased to be able to increase our ownership in the company and we look forward to being an active partner to the company and continue to support its development into a leading European e-commerce company.”

The deal includes an option for Kinnevik to acquire an additional three per cent of Zalando for up to €100m, at the same valuation from the same sellers.

Featured image: Kinnevik chairman Cristina Stenbeck

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