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Gobi Partners to invest in e-commerce platform Hermo

Gobi Partners, Shanghai based venture capital led US$ 2 million series A investment in Malaysian e commerce platform Hermo. According to sources, the investment will be used to strengthen and expand the e-commerce website of the company, with its primary focus being on bringing in new team members, enhancing marketing efforts and establishing regional offices outside of Asia to drive market expansion.
 
 
Malaysia’s cosmetics e-commerce website Hermo announced today a US$2 million Series A round led by Gobi Partners. The company said the money will be used for hiring, strengthening product and expansion, specifically citing goals for market growth in Indonesia and operational advancement in Singapore.
 
Co-founder and CEO Ian Chua explained to e27 why Hermo sought a double-digit round despite being a profitable company. “In the e-commerce world, if you are not growing, you are dying. We have grown to a point that we need capital to make it to the next stage of development and our vision is bigger than ‘just being profitable’. We want to be regionally viable and that requires a lot of cash. We need to localise operations outside of Malaysia and bring on key talents in those markets, so bringing on outside investors is a natural decision,” he said.
 
Chua said Indonesia is an interesting market because of its relatively low e-commerce penetration rate. He said they are in talks with potential business partners because, right now, “it is about getting in the market”.
 
“We will have significant operations within three countries by the end of the year – Malaysia, Singapore and Indonesia. We are already the top cosmetics e-commerce site in Malaysia and believe we can duplicate this success in other markets,” Chua said.
 
With more than 3,000 products available at any given moment, Hermo boasts 150,000 monthly active users. Chua said nearly half of all traffic comes via mobile but transactions are completed predominantly via desktops. From October 2014 through September 2015 Hermo made RM10 million (US$2.38 million) in revenue — triple growth year-on-year.
 
The most popular brands come from Korea. “We believe that Hermo will continue to benefit from the Korean wave. We will work with them to establish improved supply chain relationships with suppliers and manufacturers from Korea and other major cosmetics markets,” said Kay-Mok Ku, a Partner at Gobi Partners, in an official statement.
 
Based in Johor Bahru, the company was founded in February 2012 by Chua and PS Chong, Vice President of Merchandise, in their RM400 (US$95) per month apartment. Ian Mok joined one year later and is currently the COO.
Before this most recent funding, Hermo received seed and angel funding from Singaporean investment firm Crystal Horse Investments and Malaysian angel investor Tan Swee Yeong.
 
Source : e27
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E Commerce, Technology