Why is Qatar investing in French e-Commerce and how does France get more benefit from it

Jan 6, 2014
Vote on Hacker News

qatar_gratteciels

The French e-commerce website vente-privee.com is welcoming a sounding investor to its shareholder structure – Qatar Holding. The investing fund is a sovereign fund from Qatar and a very prestigious name to bear as an investor given the brands it usually invests in. Such is the case of the Harrods Group, which was purchased by Qatar Holding in 2010, and also LVHM in which Qatar Holding also has a stake as a shareholder. Vente-Privée is a French e-commerce startup that sells fashion & house products at sales prices. When they started in 2001 it was quite disruptive since they created a new market for online shopping in France. Today they fulfill more than 150.000 daily orders, in roughly 1,6 billion euros in revenues last year.

Jacques-Antoine Granjon, founder of vente-privee.com, stated that this doesn’t represent a new capital raise or any change in the company’s capital. He stated that very recently one of its shareholders showed a potential interest selling out his stock, and this led the French entrepreneur to rethink its capital structure altogether. In the end, the shareholder who showed interest to leave stayed as investor, but another investor who remains unknown changed positions with Qatar Holding who is now owner of the named shares.

Although we don’t know how much of Vente-Privée Qatar Holding now owns, Jacques-Antoine said that it was a very small stake – nonetheless a move that is probably smarter than the notoriety of the new shareholder, given the investment portfolio of Qatar Holding in companies such as LVHM Vente-Privée will now have privileged relations with such companies – a true advantage for the internet startup.

For the French entrepreneur this is good news that might cheer up the staff after a French court ruled that the company’s name could not be protected as intellectual propriety. The case originated in a lawsuit between Vente-Privée and its main competitor – Showroomprive.com. The topic of disagreement was the supposed abusive use of Vente-Privée’s brand name. Apparently French courts decided that no wrong had been done by Showroomprivée since the name Vente-Privée denotes common words in French that cannot be appropriated by any company – the same way we cannot register “Water” as a brand, imagine if you had to pay royalties to another company to sell “water”. There was a big fuss about this case although in the end Vente-Privée stills holds solid ground with its brand. They might be unable to register the brand as intellectual propriety, but the Competition Authority in France will recognize the notoriety of the brand if another company tries to gain from its reputation, even if its not IP protected.

For those who don’t know Jacques-Antoine you will find humor in the French founder, in a direct response to Amazon’s project to deliver purchases through drones, and Groupon’s (fake) project to deliver orders to its customers by catapult, Vente-Privée has announced their plans for distribution innovation: teleportation, hours of fun.