UK development finance institution CDC Group has invested $27.5 million of equity in India-based Jabong as part of the e-commerce business' latest funding round, according to a statement from the firm.
Other investors have joined the equity fundraise, which is expected to reach about $100 million, local media reported.
Jabong.com was launched in January 2012 as an apparel and fashion online retailer. The direct investment from the London-based LP and will help to drive growth and develop the supply chain infrastructure, the statement said.
CDC’s investment comes just months after the firm hired Alagappan Murugappan as its managing director in Asia to replace Anubha Shrivastava, who left the firm last year.
The firm continues to utilise a direct investment strategy to invest in India. In August last year, CDC and The Abraaj Group teamed up to make an equity investment of $17.5 million in Rainbow Hospitals, an Indian healthcare chain planning to expand from the state of Andhra Pradesh to other parts of the country, Private Equity International reported earlier.
In similar moves, other development finance institutions have demonstrated their commitments to India while some private investors have retreated.
Last February, the International Finance Corporation and Yes Bank established a private equity fund to invest in small- and medium-sized enterprises located in Northeast India.
Later, in June, the Global Environmental Fund promoted Sridhar Narayan to managing director from principal in the firm’s Mumbai office, according to an earlier company statement. Narayan joined GEF in 2012 from JRE Partners, a growth capital private equity firm in India. Just a month earlier, GEF had invested in an early stage Indian energy efficiency firm from its Earth Fund, which was established in 2008 in partnership with the IFC.
The Jabong investment is the latest social impact investment by an LP in India, which is suitable for DFI capital as there is a strong need for development and a lack of both private and government funding in many sectors.
CDC said in a statement, “A strong and progressive management team and its success to-date make the investment attractive for CDC from a commercial perspective as well as its potential to fulfil CDC’s mission ‘to support the building of businesses…creating jobs and making a lasting difference to people’s lives in some of the world’s poorest places.’”