How a shelf company called ‘Jakeland’ went on to become an ecommerce darling

The now ubiquitous luxury ecommerce business Net-A-Porter began its life on the 5th of August 1999, as the rather more bland Jakeland Limited, an unassuming shelf company.

The original business plan envisaged a business called What’s new Pussy Cat (but we discovered with help of Olswang LLP, that this name was copyrighted, due to song rights), after a lot of business development, emails, day and night meetings, negotiations, a business plan for “” was created, with Jakeland Limited becoming Net-a-porter Limited.

Mark Quinn-Newall provided the majority of the loans for the initial start-up development work, along with a loan from Arnaud Massenet which funded the company’s activities in late 1999 and early 2000, until the first round of external funding was obtained in March 2000 – a round of funding held during NASDAQ crash of 2000. These original investors were those people who invested a total of £800,000 at a pre Money £1.4 million valuation, a post money £2.2 million.

Their investment initial was via a convertible debenture bond, which was converted into ordinary equity at £14 per share, which was the price paid by all the first-round investors, with the actual website going live later in mid June 2000.

Of course, in July 2011, a further change to Net-A-Porter Group Limited was made, with the ultimate merger with Yoox in late 2015, to form YNAP. This is when the final shareholders who had paid £14 for their shares in 2000, were able to sell to Compagnie Financiere Richemont SA (Swiss based Luxury group who was ultimate majority shareholder in NAP Group via their Largenta Limited (UK reg nos 7192057) a price of £2,135 , which valued the entire NAP Group company at £1.45 BILLION vrs the original £1.4 MILLION Pre money first external round of Funding in March 2000. – Nice financial IRR of 38% over 16 years!

This £1.45 Billion Enterprise valuation, (adjusted to £1.295 billion) was mutually agreed at a legally binding arbitration process by all minority NAP Group shareholders , between the NAP Group minority shareholders and the majority shareholder Compagnie Financiere Richemont SA, (Swiss based Luxury group who was ultimate majority shareholder in NAP Group via their Largenta Limited (UK reg nos 7192057) subsidiary, with an independent valuation assessed by Deloittes LLP in 6 Aug 2015..

Richemont had originally in 1st May 2015 tried to purchase all the minority NAP Group shareholders at a enterprise valuation of £912 million , (See attached 8 page DCF valuation model that Richemont offered to the NAP Group B & C class minority shareholders.)

The Minority NAP Group Shareholders believed (correctly!) that the NAP Group was worth significantly more than £912 million, and Deloittes LLP in a legally binding arbitration process on both majority and minority shareholders gave an enterprise valuation of £1.45 Billion (adjusted to 1.295 billion) on 6th Aug 2015

It is worth noting (and that is another story for another day) that the acquisition of NAP Group by Yoox (Public company trading on Milan Stock Exchange) was for a significantly different valuation paid to the NAP Group minority shareholders in Sept 2015 compared to the value that the Majority shareholder accepted from Yoox to agree to the merger creating YNAP as a public company.. Click here for further information as part of that narrative of the creation of YNAP narrated by WWD. [PDF Archive]

Further information on Net-A-Porter can be found on the Wikipedia Page.

Jakeland created 5 Aug 1999 Mem & Articles

[I’ll post further details of the early history of Net-A-Porter and some of my other investments to the timeline in coming months – MQN]