Arun Chandra Mohan, co-founder and CEO of Rocket Internet-incubated Indian fashion and lifestyle venture Jabong, has quit the firm. The company is currently looking for a replacement. Its other co-founder Praveen Sinha will head buying and sourcing operations for Jabong along with Nils Chrestin, CFO at Global Fashion Group (GFG) until a new CEO is appointed.
Meanwhile, a Mint report said Sinha will also be leaving the company towards the end of this year.
However, responding to a VCCircle email, the company said Sinha is staying with the company.
Here's the official statement from the company: "Arun Chandra Mohan, CEO and co-founder, has decided to pursue a new business venture and has resigned from Jabong by mutual agreement. We are hiring a CEO and in the interim buying and sourcing functions will be led by Nils Chrestin, CFO of Global Fashion Group. Praveen Sinha, MD and co-founder, will continue to lead all functions at Jabong. We are thankful to Arun for his contributions to Jabong. We wish him all the best for his future endeavors."
Quoting unnamed sources, Mint reported that Mohan is mulling to launch a venture in the Internet mobile segment and that Jabong's global leadership has mandated an international executive search firm to find a replacement for him.
Jabong was brought under a new holding firm GFG, which also houses four other online fashion e-com startups backed by tech incubator-cum-investor Rocket Internet and Swedish investment firm Investment AB Kinnevik. Luxembourg-based GFG has since become the umbrella firm for five fashion e-commerce companies namely Dafiti (Latin America), Jabong (India), Lamoda (Russia and CIS), Namshi (Middle East) and Zalora (South East Asia and Australia). As part of this rearrangement, GFG hired 34-year-old Nils Chrestin, former CFO of Russian online retailer Lomada, as its chief financial officer. Chrestin was managing director and CFO of Lamoda in Moscow prior to being appointed as GFG's CFO in January 2015. Previously, he was a private equity investor at Morgan Stanley Private Equity.
Jabong is one of the two top lifestyle e-tailers in India, along with Myntra.
Earlier, e-commerce giant Amazon.com was in talks with the firm for a potential acquisition worth $1.1-1.2 billion. However, the talks did not progress. Jabong's rival Myntra was acquired by Flipkart last year.
The core model of German internet firm and startup incubator Rocket Internet is to replicate successful global internet businesses in emerging markets outside China with rigorous marketing. It brings in industry executives, gives them stakes in its companies and designates them as co-founder/founder/CEO. Thus, Sinha and Mohan were designated as co-founders even though Jabong may not have been their brainchild.
It became the top money losing initiative for the German emerging markets and Europe focused internet company.
Jabong's operating loss margin rose far ahead of Southeast Asian lifestyle e-commerce firm Lazada and Latin American e-commerce marketplace Linio in the first quarter of 2015, making it the most operating
loss-making property among Rocket Internet's top ventures.
Last year, in the same quarter Lazada sported the biggest EBITDA (earnings before interest tax and depreciation and amortisation) loss margin with Jabong and Linio being neck to neck, as per data shared by Rocket Internet (see graph).
Jabong also happens to be only the second key venture of Rocket Internet besides home24 that saw deterioration in operating margins compared with Q1 2014.
The company has also been trailing other global 'proven winners' of Rocket Internet in terms of growth of net revenues or actual revenue booked by companies (gross merchandise value or GMV also captures sales from third-party sellers where Jabong only gets a listing fee). It was also the only top venture sporting under 50 per cent revenue growth in Q1, besides Brazilian lifestyle e-tailer Dafiti.