Kinnevik said it will go ahead to sell its remaining stake in Lazada, a Rocket Internet startup where the Swedish company holds 3.6% stake.
Kinnevik said it will sell the stake to Alibaba Group Holding Limited for a gross consideration of USD115 million.
Lazada was started in 2012 as an eCommerce for local and international sellers and brands to the consumers in six distinct Southeast Asian markets: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
In April 2016, Kinnevik sold slightly less than half of its shares in Lazada to Alibaba for a gross consideration of USD 57m as part of a larger transaction where Alibaba became Lazada’s controlling shareholder. The 2016 transaction equated to a post-money equity valuation of USD 2.0bn for Lazada. In connection with the transaction, Kinnevik and other shareholders entered into a put-call arrangement with Alibaba, giving Alibaba the right to purchase, and the shareholders the right to collectively sell, the remaining stakes at fair market value within 12 to 18 months post closing of the transaction.
Kinnevik disclosed that the transaction implies a SEK 327m, or 47%, uplift versus Kinnevik’s recorded fair value per 31 March 2017. In total, Kinnevik’s investment of SEK 503m in Lazada is expected to result in a gain of SEK 933m, a cash-on-cash multiple of 2.9x and an IRR of 33%, as at 27 June 2017.
Rocket Internet has confirmed the deal. Oliver Samwer, CEO of Rocket Internet said “Lazada was a great success for us and underscores our ability to successfully build businesses in growth markets. Since the company was founded in 2012 in Southeast Asia, Lazada has become the leading eCommerce provider in the region”.
He added that “This is just the beginning for Lazada Solutions, taking local characteristics into account to expand market leadership in their six markets. ”
The latest sell exit of Kinnevik is buttressing its third attempt at parting ways with Rocket Internet as both companies further become competitors across Africa and Western Europe where they both invest in startups.