Berlin-based Rocket Internet is reportedly in talks with Kishore Biyani-led Future Group to sell its online furniture retailer FabFurnish, as competition gets tough in the e-commerce space in India.
Rocket Internet operates e-commerce firms Jabong, Foodpanda, and FabFurnish in the country. The firm has also "informally" offered Jabong for sale, but Biyani hasn't evinced interest to acquire it, sources familiar with the matter told The Economic Times.
Both the parties have reached an agreement regarding the sale of FabFurnish, according to the sources. FabFurnish is expected to be sold for $5-10 million.
For Future Group, it will mark the first acquisition in the online space, if the deal goes through.
"The two are in definite talks to close the FabFurnish deal. Sale of Jabong is still at the proposal stage and no talks have started on it yet," a source told the daily.
However, Jabong said that it was not put up for sale.
"Jabong is not in discussions, at any stage, with anyone, regarding a sale of the company. The company's largest see-through investor reiterated earlier this month its commitment to the business and the Indian market," said a company spokesperson.
Fashion and lifestyle e-commerce portal Jabong had recorded a five-fold increase in losses to Rs 160 crore during the calendar year 2014 due to high discounts on its offerings, although its revenue growth went up by 136 percent to Rs 811 crore.
In September last year, it was reported that Rocket Internet was planning to change its strategy and form a venture capital fund to invest directly in firms in India rather than "incubating startups".
Some analysts said that a shift in the company's strategy underlines that its model of operations in India has been unsuccessful.
