29900% increase in revenue - the most successful media for equity deal ever

By now, everyone is probably familiar with Zalando.  Zalando is a German e-commerce company headquartered in Berlin, offering fashion and various lifestyle products to a multinational European market.

Zalando was founded in 2008 as an online shoe retailer. It was one of the first companies to sell shoes online. Although a lot of people were skeptical about people buying shoes online, it became a huge success. 

What a lot of people don’t know is that at the core of Zalado's success was a media for equity investment. In 2009, Zalando got in contact with SevenVentures, the investment arm of the German Media & Entertainment Powerhouse ProSiebenSat.1. SevenVentures offers consumer brands that have the potential to become household brands TV-advertisement in exchange for equity. 

Zalando secured a deal from SevenVentures and started a massive campaign on TV aired throughout Germany. When you look back in Google Trends to the point where they started TV advertising, the organic search volume for ‘buy shoes online’ and 'Zalando’ exploded. This shows that Zalando became very efficient as a brand, they received more branded traffic, and marketing got cheaper. People were looking for ‘Zalando’, which is much cheaper than ‘buy shoes online’. Also, the generic search terms gained more volumes so new players could enter this vertical. They did not just create a household brand. Zalando created a whole new market. Then they replicated the model for other vertical markets stepping away from shoes online, and they are still doing that now. 

Zalando's annual sales skyrocketed from $6 million in 2009 to $1.8 billion by 2013. A 29900% increase in annual revenue in a matter of just four years. 

Zalando is a great case to illustrate how companies can benefit from media for equity and become market leaders within a short period of time. The deal has become one of the most well-known blockbusters of a media for equity deal.