Kinnevik and Rocket Internet to create global fashion e-commerce group

Dafiti, Jabong, Lamoda, Namshi and Zalora to be combined into a single group of emerging markets focused fashion e-commerce brands

Investment AB Kinnevik ("Kinnevik") today announced that it has entered into a definitive agreement with Rocket Internet and other co-investors to combine five leading fashion e-commerce businesses, namely Dafiti (Latin America), Jabong (India), Lamoda (Russia & CIS), Namshi (Middle East) and Zalora (South East Asia & Australia) to create a new global fashion e-commerce group, Global Fashion Group ("GFG").

GFG will operate across the five continents with a focus on growth markets, covering 23 countries with a EUR 330bn fashion market and population of over 2.5bn people who continue to move rapidly online and purchase via e-commerce. GFG will market a wide assortment of leading international apparel and accessories brands, a tailored selection of highly engaging internally developed brands and local assortments developed for specific ethnic markets notably in India, Indonesia and the Middle East.

GFG will maintain multiple business models including full inventory, branded shops and marketplaces tailored to the opportunities within the local markets. In addition, GFG will continue to explore the development of adjacent categories like personal care. Mobile commerce will remain a core focus for GFG through the continued development of mobile applications aimed at the growing smartphone user base in its territories.

The five GFG companies combine a unique expertise of developing leading online brands (e.g. Dafiti in Brazil), building the necessary infrastructure including where necessary last mile delivery networks (e.g. LaModa Express in Russia, Jabong in India), creating leading private label brands (e.g. "Lara Karen" and "Sangria" by Jabong in India and "ZALORA" and "Ezra" by Zalora in South East Asia) and delivering best-in-class mobile applications (e.g. Namshi in Middle East).

The combination will improve global best practice sharing across functions, deliver economies of scale in sourcing international brands and marketing with global media channels, strengthen the private label efforts, enhance GFG's ability to attract and retain top talent, accelerate development of technology platforms, and enable GFG to acquire a leadership position in growth market fashion e-commerce.

Per 30 June 2014, GFG had 4.6m active customers[1]and over 7,000 employees. For the first six months of 2014, GFG websites had 353m unique visitors[2], received 8.4m orders[3] and generated EUR 436m of Gross Merchandise Volume[4]. In 2013, GFG's IFRS revenues amounted to EUR 406[5]m.

Since launch in 2011 and 2012, the five e-commerce companies have attracted funding in excess of EUR 1bln from Kinnevik, Access Industries, Summit Partners, Verlinvest, Ontario Teachers' Pension Plan, Tengelmann and a number of other investors.With approximately EUR 350m of cash as of 30 Jun 2014, GFG is very well capitalised to continue to execute on its plans and capture its growth opportunities.

Substantially all the direct and indirect shareholders in the five existing e-commerce companies will contribute their shares into a newly formed Luxembourg-based entity. The three largest shareholders in GFG will be Kinnevik, Rocket Internet and Access Industries, with 25.1%, 23.5% and 7.4% ownership interests, respectively.

The GFG companies will continue to be led by their respective founders and management teams with a few select additions to the leadership team intended to foster group synergies and the pursuit of global initiatives.

The Board of Directors of GFG will include Lorenzo Grabau, CEO of Kinnevik as Chairman, Oliver Samwer, CEO of Rocket Internet as Deputy Chairman and representatives of the other largest shareholders.

For the purposes of the combination, the five companies were valued according to their last funding rounds, resulting in a valuation of EUR 2.7bn for the combined entity.

The agreed transaction is subject to binding rulings by fiscal authorities and antitrust approval. Closing is expected in late 2014.

Kinnevik has also entered into an agreement with Phenomen Ventures to acquire additional shares in Bigfoot against payment partly in kind through Kinnevik's shares in HelloFresh and partly in cash through a payment of EUR 18m. The transaction will increase Kinnevik's ownership in GFG by 1.0% to 26.1%.

Lorenzo Grabau, CEO of Kinnevik, said:

"The creation of GFG brings together five powerful digital brands led by a unique group of highly talented founders and managers. By operating as a single entity, Dafiti, Jabong, Lamoda, Namshi and Zalora will be even more effective in expanding their leadership positions in their respective marketplaces."

Oliver Samwer, co-founder and CEO of Rocket, commented:

"GFG will be focused on capturing the massive growth opportunity of fashion e-commerce in emerging markets. Each of the business units will be able to build on the original Rocket platform and continue to leverage knowledge and expertise gained across 23 countries. I look forward to working with our founders in accelerating GFG's growth profile and development even further."

Kinnevik discloses the information provided herein pursuant to the Securities Market Act (Sw. lagen om värdepappersmarknaden (2007:528)). The information was submitted for publication on 4 September, 2014 at 9.00 am (CET).

For further information, visit www.kinnevik.se or contact:

Investment AB Kinnevik is a leading, long-term oriented, investment company based in Sweden. Kinnevik primarily invests in consumer centric businesses that provide innovative and value-added technology-enabled services. Our main areas of focus are the Communications, e-Commerce, Entertainment and Financial Services sectors. We own significant stakes in over 50 companies that operate in more than 80 countries across five continents, with a particular emphasis on growth markets. The Kinnevik Group employs more than 90 000 people around the world.

Kinnevik actively supports the companies in which it invests and plays an influential role on their respective Boards. Kinnevik was founded in 1936 by three Swedish families who continue to play a leadership role in the ownership of the Company and in the pursuit of its entrepreneurial ventures.

Kinnevik's shares are listed on Nasdaq OMX Stockholm's list for large cap companies under the ticker codes KINV A and KINV B.

[1]Number of customers having made at least one transaction as defined in "total transactions" within the last 12 months before end of period calculated as the sum of active customers for the companies excluding Jabong.

[2]Number of total unique identifiers visiting the website in the period (including from mobile & tablets) calculated as the sum of unique visitors for the five companies.

[3]Total number of valid (i.e., not failed or declined) orders starting the fulfillment process less cancelled orders (before rejected and returned orders), i.e., total number of orders shipped in the period (e-commerce excluding marketplace).

[4]The total value of "total transactions" sold in the period, excluding taxes and shipping costs (taxes and shipping costs excluded for comparison reasons between countries and companies), including value of vouchers. Calculated as the sum of GMV for the five companies.

[5]Calculated as the sum of IRFRS revenues of the 5 companies.