German retail group Tengelmann has invested an eight-figure euro sum (reportedly up to €15 million) in LINIO, Rocket Internet‘s Colombian e-commerce firm. LINIO, which has a German holding company, is an Amazon clone specialising in selling home electronics including TVs, computers and mobile phones.
It is also active in Mexico, Peru and Venezuela, and claims to be the fastest-growing online sales portal in Latin America. LINIO marks the second Rocket investment for Tengelmann this year after Southeast Asian e-commerce site Lazada, to which it also provided eight-figure funding.
LINIO has been driving its growth in recent months through special offers such as for Black Friday and Cybermonday in late November, which helped increase sales by 70 percent and sales by 91 percent by the end of the year. The company says it is trying to educate the Latin American market about the benefits of shopping online and focuses on customer service – including the recent introduction of a new logistics system which enables delivery of most products within two to four days.
The e-commerce space in Latin America has been lagging behind other markets but the continent, while still very diverse in this respect, is now increasingly online (its online population grew faster than any other global region in 2011) and is firmly in the crosshairs of many companies – and not just larger concerns. LINIO faces competition from the likes of MercadoLibre, an established brand in Brazil, Argentina and Mexico
Christian Winter, CEO of Tengelmann Ventures, said: “Their [LINIO's] growth trajectory, management team and investor base speak for themselves and we are confident that the company will succeed in the long run.”
Vagn Knudsen, general manager of LINIO Colombia, added: “This investment, together with the wide knowledge that the Tengelmann Group has about retailing, will help us to continue to position LINIO as the most important e-commerce company in Colombia.”
The Tengelmann Group has an annual turnover of €10 billion and controls a number of enterprises including store chains such as Kaiser’s and OBI in Germany and A&P Tea Company in the US. Through its Tengelmann Ventures subsidiary, it has been investing in digital startups for several years, including in Stylight, Delivery Hero and HitFox. It joins AB Kinnevik, J.P. Morgan Asset Management and Summit Partners as investors in LINIO.