Cipio Partners’ investment in Madrid-based online fashion retailer BuyVIP catapulted a young European start-up towards international growth and acquisition by the world’s largest online retailer Amazon. Cipio Partners invested in BuyVIP, a flash sales website that sells clothing at steep discounts for short periods of time, as part of a portfolio of companies acquired from 3i Group plc in 2009.
In doing so, it became the largest investor in a complex syndicate of shareholders with differing resources and objectives. However, the investor group recognised BuyVIP’s potential would be maximised as part of a major online retail group and, after significant investment, orchestrated BuyVIP’s successful sale to Amazon in 2010. The sale turned BuyVIP into the foundation of Amazon’s growing fashion flash sales business across Europe, ultimately leading to more new employment in Spain, Germany and Italy.
Thanks to the support of our international investors we have been able to grow our business across seven European countries, thus establishing the first pan-European flash sales website. This success made our company the logical acquisition target for Amazon.
Gustavo García Brusilovsky Former CEO, BuyVIP
What did the business need?
- More people and better processes to manage rapid growth
- Help to expand into new and unfamiliar markets
- Substantial investment in IT and logistics infrastructure
How did private equity backing create lasting value?
- Built an international, experienced and highly-dedicated management team
- Provided a strategic plan to grow in a competitive sector
- Identified the best potential acquirers of the business and positioned the company for sale
- Funded development of new IT platform
- Supported entry in six international markets outside the home country
What outcomes did private equity investment achieve?
- Increased sales from €23m to €97m over two years
- Increased employee numbers from 123 to 201
- Achieved a strategic takeover by no.1 online retailer Amazon
- Achieved increase in customer numbers from zero to 6m in seven European countries by 2010