LONDON – Online luxury fashion retailer Farfetch has raised nearly $ 400 million (Â£ 315.5 million) from one of China’s largest e-commerce companies.
Farfetch announced Thursday that Chinese online mall JD.com has invested $ 397 million (Â£ 313 million) in the company, making JD.com one of Farfetch’s largest shareholders. The duo also signed a “strategic partnership” that will help Farfetch break into China.
Farfetch, headquartered in London, is an e-commerce platform that brings together luxury boutiques from around the world, enabling the global elite to shop virtually at over 700 stores in places such as London, New York. and Paris.
The company is already active in China, but said in a statement that the JD.com partnership will help “increase Farfetch’s brand awareness, traffic and sales in the market.” Farfetch highlights JD.com’s logistics expertise in China, where it offers same-day delivery, as a particularly powerful boost.
JosÃ© Neves, Founder and CEO of Farfetch, said in a statement: âChina is the second largest luxury market in the world, and we are delighted to have such a respected partner, known for its strict intellectual property protection. , with whom to contact Chinese luxury consumers. .
âThis partnership responds to market challenges by combining the Farfetch brand and curation with the scale and influence of China’s largest e-commerce giant.
The investment more than doubles Farfetch’s total share capital. The company had raised just over $ 300 million in six funding rounds prior to this investment.
For JD.com, the agreement is helping it gain a foothold in the luxury market. The company is much like Amazon in China, but it’s better known for consumer electronics and mid-range clothing than luxury, which it is trying to change.
Richard Liu, CEO of JD.com, said in a statement, âAs part of our major luxury campaign, we couldn’t have found a stronger online partner than Farfetch. We have always believed that the long term trend of e-commerce prioritizes quality over price and this partnership with Farfetch further extends our lead in the battle for the future of Chinese mobile consumers upwards. “
Liu joins Farfetch’s board of directors as part of the deal.
Founded in 2008, Farfetch’s most recent public accounts show it lost Â£ 28.6million on revenue of Â£ 87.1million in 2015. The company was valued at $ 1.5bn (Â£ 1.1bn) in a funding round last year, making it one of Britain’s few ‘unicorns’ – private companies worth over $ 1 billion. The rating is not disclosed in the JD.com agreement.
JD.com, founded in 1998, had revenues of $ 11.6 billion (Â£ 9.1 billion) in the last quarter of 2016. The Beijing-based company is listed on the Nasdaq New York Stock Exchange, where it has a market capitalization of $ 57.6 billion (Â£ 45.4 billion).