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The funding will allow Netshoes to continue its growth without sacrificing investment in online tools to improve the shopping experience, says the company’s founder and CEO.
Brazilian web-only sporting goods retailer Netshoes, No. 4 in the 2013 Latin America 400, announced yesterday it raised $170 million in a new funding round led by GIC, Singapore's sovereign wealth fund.
GIC is a leading global investment firm with well over $100 billion in assets under management; they have been increasing their presence in Brazil since they opened an office in São Paulo. “We believe that Netshoes is one of the strongest e-commerce players in the world,” says Wolfgang Schwerdtle, senior vice president, GIC Special Investments, as GIC joins Netshoes’s other shareholders: Tiger Global Management, Temasek Holdings, Iconiq Capital and Kaszek Ventures.
Netshoes consolidated in 2013 net revenues of R$ 965 million (U.S. $432.3 million), an increase of 21% compared to 2012. Marcio Kumruian, CEO and founder of Netshoes, says the new capital will “motivate us even more to keep pursuing our goals: the continued sustainable growth plan, without giving up on investing heavily in innovations that improve the shopping experience for our customers."
GIC’s investment is the largest in Netshoe’s history, says José Rogério Luiz, vice president of corporate development for Netshoes. "It happens at a time of relative economic instability in the country, which proves the fact that good companies with solid fundamentals remain able to attract the attention of blue chip investors," he says.
The investment comes as Netshoes has undergone a few changes in the past six months. In February, Netshoes launched a new branding campaign, changing the look and feel of its logo and web site. The changes seek to convey the feeling of "movement and energy of sports to consumers," says Renato Mendes, Netshoes’s marketing and communication manager.
Juliano Turbino joined Netshoes in December 2013 as chief marketing officer. Turbino comes from Amazon.com Inc., where he was director of marketing. Prior to working at Amazon, he was global director of innovation and strategic affairs at Microsoft.
In an attempt to reduce return rates, Netshoes uses Shoefitr software, which enables customers to know how a shoe will fit depending on the brand of the shoe. Shoefitr asks consumers a few details of the shoes they currently use and suggests with that information the best size and fit for the specific brand they are looking to purchase.
Another web site feature attempts to predict what a consumer will need next. Based on purchases, Netshoes creates shopper profiles for each consumer; Netshoes then predicts future purchases by sending the consumer items they will need before the consumer orders them. For example, if consumer uses a whey protein shake purchased at Netshoes, the company will send another shake before the current shake runs out. If the consumer does not need or want the item, it can be returned at no cost.