US-based financial firm JP Morgan is to invest $45 million in Dafiti, built with the backing of Berlin incubator Rocket Internet and now the largest online fashion retailer in Brazil. The investors will take a holding in the e-commerce site, which offers customers a variety of products, including clothing, shoes, accessories, cosmetics, and home wares.
In a telling move that comes less than a week after the announcement of an investment in rapidly expanding European online retail giant Zalando, JP Morgan is clearly eager to up its stakes in the e-commerce industry globally and has recognized the potential of the Brazilian Internet market.
They’re not the only investors who are taking note of Brazil’s growth. Just a month ago Redpoint E.ventures raised $130 million in funds to be invested in Internet startups in Brazil. There, e-commerce in particular is on the rise, with the burgeoning Brazilian middle-class turning to the convenience of online shopping.
Similarly to Zalando, Rocket Internet’s European-focused e-commerce retailer, Dafiti offers customer perks such as free shipping and returns within 30 days, along with the option for customers to suggest clothing they’d like on the site.
Rocket Internet’s involvement in a company usually means extremely aggressive growth, which so far seems to be paying off for the Brazilians. In the year since Dafiti’s launch in 2011, the e-commerce site has grown from a team of ten to a 1,000-strong workforce, distributing over 60,000 products and getting 30 million website visits per month.
Dafiti founder Philipp Povel appears confident that this is just the beginning of the e-commerce website’s success. He told Reuters, “Brazil is still a huge country whose online potential needs to be tapped, and we are very well prepared to do that.”
The company said it would also use the new cash to “expand our presence in other countries in Latin America, namely Mexico, Argentina, Chile and Columbia.”