With this move, the international retail and services group will build on its position as one of the largest and most successful venture capital providers in Germany.
Venture Capital For Promising Business Ideas In E-Commerce, Mobile, and Software
“With our venture activities, we are pursuing our goal of discovering promising digital business models in Europe, the US and Asia in their early phases and to benefit from them in the Otto Group’s retail and service businesses”, explained Dr Rainer Hillebrand, Deputy Chairman of the Executive Board, the Group’s strategy at a recent press conference. Funding is primarily provided to start-ups in e-commerce, mobile, and software. To date, the Otto Group has invested an amount in the mid-triple-digit millions in over 100 shareholdings of more than ten countries.
Since 2008, the Otto Group has been active in the venture capital business with e.ventures, which invests successfully in digital business models in the early and later-stage phases. Since 2012, the Otto Group has also participated in Project A Ventures, the operational early-phase investor and company builder, as founding partner and investor. Some of e.ventures’ successful involvements include the platform auctionata, Azimo, and farfetch, a portal for luxury good. The Project A portfolio includes companies such as Spryker, nu3, World Remit und Tictail. This combination of venture capital financing is unique in the German market. It is also a key component of the group’s e-commerce strategy with its four pillars: transforming, participating, creating, and venturing.
Pioneering Digital Transformation
As a pioneer in Multichannel Retail, i.e. mail order, over-the-counter, and online retail, the Otto Group has driven digital transformation step by step in its approximately 123 companies over the last few years. Blue Yonder, for example, has been well received in the market, as has the payment system Yapital. With the ‘Collins’ business model launched in 2014, the company has successfully expanded into founding online pure plays, which corresponds to the third pillar of its e-commerce strategy, the ‘Create’ mandate. A three-year plan to the end of the 2015/2016 financial year budgets investments of around 300 million euro in total towards the implementation of the e-commerce strategy in the core business.
The World’s Second-Largest Online Retailer To End-Consumers
According to preliminary estimates for its retail and service business, the Otto Group expects online sales amounting to around 6.3 billion euro (a plus of around 2.5 per cent) for the current 2014/15 financial year (28 February), thereby confirming its leading position as second-largest online retailer to end-consumers worldwide. In Germany, the Otto Group is market-leader in online retail for fashion and furniture. The, more than 100 online shops accounted for a prognostised three per cent growth to 4.1 billion euro in the current fiscal year.
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