Otto Group will invest heavily in global e-commerce and digital startups
February 24, 2015 12:54 PM
Germany-based e-retailer and e-commerce behemoth Otto Group plans to invest a lot of money in digital-focused businesses in Europe, the U.S. and Asia over the next two years.
Otto, which owns home furnishing retailer Crate & Barrel and European fulfillment provider Hermes, said it is planning a high double-digit million euro investment in e-commerce, mobile and software startup ventures over the next two years.
Otto Group, No. 2 in the Internet Retailer Europe 500, grew 2013 online sales 7.6% to €6 billion ($6.79 billion) from €5.576 billion ($6.31 billion) a year earlier. Otto expects 2014-2015 e-commerce sales to reach €6.3 billion. The company has been active in the venture capital business since it launched e.ventures, which invests in early and later-stage digital businesses.
“As venture capitalists, we are successful in financing global startups with high disruptive potential, most recently in the traditional service industries, the financial sector and in the market for networked appliances,” says Andreas Haug, partner at e.ventures.
Otto Group also is a major stakeholder in Project A Ventures, a business and technology startup incubator. With A Ventures, Otto says it wants early access to ideas, promising online business models and qualified entrepreneurial talent.
E.ventures’ investments include U.K.-based web-only luxury retailer FarFetch.com, No. 95 in the Europe 500 with €230 million ($260.25 million) in 2013 online sales, up 144.47% from an estimated €94.08 million ($106.45 million) in 2012. The Project A portfolio includes companies such as Spryker, an e-commerce product development platform that also is backed by Rocket Internet AG and online shopping cart Tictail.
“We are very happy with our performance,” says Florian Heinemann, co-founder and CEO at Project A Ventures. “We are seeing a significant number of very well-positioned and high-potential companies in our portfolio, which will continue to drive return on investment in the future.”
Otto Group owns and operates approximately 123 companies. It continues to launch brands and services under the Otto umbrella, including payment system Yapital and software-as-a-service data analytics company Blue Yonder. Last year it launched The Collins GmbH & Co. KG, a fashion e-commerce startup. Otto plans to invest €300 million ($340.05 million) in its own e-commerce companies over the next two years, separate from its venture capital investments. In Germany, where it has more than 100 online shops, Otto forecasts 2014-2015 web sales to reach €4.1 billion ($4.65 billion), up about 3% from a year earlier.