Nov 2 2024, 05:50 PM, updated 2y ago
Explaining its investment and subsequent disposal of the stake, Khazanah deemed the divestment in late 2023 as "a responsible exit" after the sovereign wealth fund had reached its "targeted holding period".
At the time (2018), the company was a promising homegrown e-commerce fashion platform with more than 400 brands and 15,000 products on its platform and expecting revenue growth of about60 per cent annually.
"Our investment rationale was anchored on the theme of Offline-to-Online e-commerce, as well as a commitment to support Malaysian entrepreneurs and promising early-stage companies," it said in a statement tonight.
The statement was indirectly in response to Communications Minister Fahmi Fadzil's call for Khazanah and FashionValet to promptly address public concerns regarding their recent transaction.
On Tuesday, the Finance Ministry said Khazanah and Permodalan Nasional Bhd (PNB) had sold their collective stakes in FashionValet, Malaysia's first fashion e-commerce platform, for RM3.1 million.
The sale marked a significant loss compared to their initial RM47 million investment.
In a written parliamentary reply, the Finance Ministry revealed that Khazanah had invested RM27 million and PNB RM20 million in 2018 to acquire minority stakes in FashionValet.
Khazanah said over the years, FashionValet had faced challenges, most of which were exacerbated by Covid-19 including in expanding its platform.
This required FashionValet to shift focus from being an e-commerce platform for Southeast Asian brands to growing its wholly-owned in-house brands, Duck and Lilit, in order to preserve its operating margins and cashflow.
FashionValet also took measures to rationalise costs and streamline operations, but continued to face challenges, including in securing capital during the difficult fundraising environment in 2022-2023.
"In late 2023, NXBT Partners, led by a seasoned Malaysian entrepreneur, offered to acquire existing shareholders' stakes and inject capital into the company.
"In view of the company's urgent need for funds to continue operations, and the fact that the investment had reached the end of its targeted holding period, Khazanah considered and accepted the offer.
"The divestment represented a responsible exit to transfer ownership to a party who could help guide the company to a new growth trajectory," it said.
Khazanah said it will continue to invest responsibly and manage assets towards sustainable multi-generational returns for the country.
As part of its Advancing Malaysia strategy anchored on "A Nation that Creates" framework, Khazanah said it remains committed to transforming Malaysian firms of all sizes to increase national productivity and competitiveness, aligned with the GEAR-uP programme, led by the Finance Ministry.
"We believe that the start-up ecosystem is a vital engine for innovation, economic growth and job creation in Malaysia.
"Despite the higher inherent investment risks and challenges with early-stage companies, Khazanah is fully dedicated to supporting local start-ups and will continue to promote their success and expansion," it added.
QUOTE
Press Releases
1 November 2024
Khazanah Nasional clarifies its divestment in FashionValet
Khazanah Nasional (“Khazanah”) had invested RM27m to acquire a 9% stake in FashionValet (“Company”) in 2018. At the time, the Company was a promising homegrown e-commerce fashion platform with more than 400 brands and 15,000 products on its platform and expecting revenue growth of ~60% annually. Our investment rationale was anchored on the theme of Offline-to-Online e-commerce, as well as a commitment to support Malaysian entrepreneurs and promising early-stage companies.
Over the years, the Company faced challenges, most of which were exacerbated by COVID-19, including in expanding its platform. This required FashionValet, under the guidance of its Board of Directors and shareholders, to shift focus from being an ecommerce platform for Southeast Asian brands to growing its wholly-owned in-house brands, Duck and Lilit, in order to preserve the Company’s operating margins and cashflow. The Company also took measures to rationalise costs and streamline operations, but continued to face challenges, including in securing capital during the difficult fundraising environment in 2022-2023.
In late 2023, NXBT Partners, led by a seasoned Malaysian entrepreneur, offered to acquire existing shareholders’ stakes and inject capital into the Company. In view of the Company’s urgent need for funds to continue operations, and the fact that the investment had reached the end of its targeted holding period, Khazanah considered and accepted the offer. The divestment represented a responsible exit to transfer ownership to a party who could help guide the Company to a new growth trajectory.
As the sovereign wealth fund of the nation, Khazanah will continue to invest responsibly and manage assets towards sustainable multigenerational returns for the country. As part of Khazanah’s Advancing Malaysia strategy anchored on “A Nation that Creates” framework, we remain committed to transforming Malaysian firms of all sizes to increase national productivity and competitiveness, aligned with the GEAR-uP programme, led by the Ministry of Finance.
We believe that the start-up ecosystem is a vital engine for innovation, economic growth and job creation in Malaysia. Despite the higher inherent investment risks and challenges with early-stage companies, Khazanah is fully dedicated to supporting local start-ups and will continue to promote their success and expansion.
We appreciate the continued trust and support from our stakeholders as we work towards the nation’s economic objectives in line with the government’s Ekonomi MADANI aspirations.
TAMAT
This post has been edited by premier239: Nov 2 2024, 06:01 PM1 November 2024
Khazanah Nasional clarifies its divestment in FashionValet
Khazanah Nasional (“Khazanah”) had invested RM27m to acquire a 9% stake in FashionValet (“Company”) in 2018. At the time, the Company was a promising homegrown e-commerce fashion platform with more than 400 brands and 15,000 products on its platform and expecting revenue growth of ~60% annually. Our investment rationale was anchored on the theme of Offline-to-Online e-commerce, as well as a commitment to support Malaysian entrepreneurs and promising early-stage companies.
Over the years, the Company faced challenges, most of which were exacerbated by COVID-19, including in expanding its platform. This required FashionValet, under the guidance of its Board of Directors and shareholders, to shift focus from being an ecommerce platform for Southeast Asian brands to growing its wholly-owned in-house brands, Duck and Lilit, in order to preserve the Company’s operating margins and cashflow. The Company also took measures to rationalise costs and streamline operations, but continued to face challenges, including in securing capital during the difficult fundraising environment in 2022-2023.
In late 2023, NXBT Partners, led by a seasoned Malaysian entrepreneur, offered to acquire existing shareholders’ stakes and inject capital into the Company. In view of the Company’s urgent need for funds to continue operations, and the fact that the investment had reached the end of its targeted holding period, Khazanah considered and accepted the offer. The divestment represented a responsible exit to transfer ownership to a party who could help guide the Company to a new growth trajectory.
As the sovereign wealth fund of the nation, Khazanah will continue to invest responsibly and manage assets towards sustainable multigenerational returns for the country. As part of Khazanah’s Advancing Malaysia strategy anchored on “A Nation that Creates” framework, we remain committed to transforming Malaysian firms of all sizes to increase national productivity and competitiveness, aligned with the GEAR-uP programme, led by the Ministry of Finance.
We believe that the start-up ecosystem is a vital engine for innovation, economic growth and job creation in Malaysia. Despite the higher inherent investment risks and challenges with early-stage companies, Khazanah is fully dedicated to supporting local start-ups and will continue to promote their success and expansion.
We appreciate the continued trust and support from our stakeholders as we work towards the nation’s economic objectives in line with the government’s Ekonomi MADANI aspirations.
TAMAT
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