The move, according to TechCrunch, follows Rocket Internet’s earlier announcement to push for aggressive growth in Asia with one launch per quarter to expand in emerging markets.
The company plans to use this cash to grow its business in existing markets and to expand in other frontier markets in Asia where e-commerce is taking off.
“[The money will be spent] into healthy growth in our existing countries and maybe new countries at a later stage,” Daraz Asia’s Co-CEO Bjarke Mikkelson made a statement, hinting it may enter a new market in 2016.
About 40% of the investment amount comes from the CDC Group, a state-owned Development Finance Institution (DFI) in the UK with nearly £3.4 billion under management. It is focused on supporting and developing businesses in Africa and South Asia.
The remaining 60% comes from Daraz’s existing investor, Asia Pacific Internet Group (APACIG), one of the fastest growing internet platforms in the Asia-Pacific region, currently uniting 14 e-commerce companies in 15 countries. APACIG is 50% owned by Rocket Internet with Ooredoo owning the other half.
Before the aforementioned investment, Daraz was 100% owned by APACIG, the company said, without disclosing its current ownership structure.
The company also refused to share country-wise breakdown of this financial injection but added, “Pakistan is our biggest market,” and the investment split between countries would also reflect that, hinting that a sizeable chunk of the $55 million may be invested in Pakistan. Daraz.pk estimates the current size of Pakistan’s e-commerce market to be somewhere between $55 million and $78 million.
“The e-commerce market in Pakistan is developing fast and Daraz is proud to be part of this journey,” Mikkelson said, “Internet penetration is growing fast, the transition to smartphones is overwhelming and the number of users on the Daraz shopping App is increasing exponentially.”
Starting in 2012 as an online fashion business, the home-grown tech startup later expanded its business model to a general marketplace dealing in electronics, home appliances, fashion and many other categories and became one of Pakistan’s leading e-commerce platforms. In 2014, it launched operations in Bangladesh as Daraz.bd and Myanmar as Shop.com.mm.
The company refused to disclose its revenues but added, “The business is multiple times bigger now and growing double digits on a monthly basis”.
The online shopping website is getting 6 million visitors a month and is spending over £1 million on Infinix Hot Note, a Chinese smartphone being sold on its website, according to TechJuice.
Daraz is one of the most promising companies in APACIG’s portfolio, the company’s CEO Hanno Stegmann said in a press release. “The markets where Daraz is active are inspiring for entrepreneurs. We are looking forward to supporting Daraz in its ambition to become the number one shopping destination in Asian frontier markets.”
The company is also planning to introduce Black Friday Sales in the country to promote the culture of online shopping gain people’s trust in this segment.
