Alibaba invest $1B in Ecommerce startup Lazada

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It’s hard to call a billion dollar investment in an emerging market anything more than a major win, but for Lazada, the Rocket Internet-backed e-commerce firm in Southeast Asia, there’s more than an element of relief. The four-year-old company nearly ran out of money right before Alibaba swooped in with a majority investment, including $500 million in fresh capital and the acquisition of $500 million in stock from existing investors.

Lazada has long been billed the Amazon or Alibaba of Southeast Asia. While it may be the largest e-commerce player in the region in terms of size, under the hood, the company is far from financially healthy.

Rocket Internet’s latest financials are due Thursday, but the most recent data shows that Lazada grossed $191 million in sales during the first nine months of last year. Not bad, but the company carded a $233 million operating loss for the period, much of which was driven by the cost of acquiring users, incentives to paid to merchants and general marketing costs.

Building an e-commerce company in an emerging market sure isn’t easy.

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Source: TechCrunch

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