FRANKFURT, Germany — Rocket Internet SE fell as much as 8.3 percent in Frankfurt after a funding round by the startup investor's Global Fashion Group valued the online retailer at less than half of what it was worth a year ago.

Rocket Internet, which owns about 23 percent of Global Fashion Group, said the unit was valued at 1 billion euros ($1.1 billion), compared with an implied valuation of €2.8 billion a year ago. Sweden’s Investment AB Kinnevik, which owns 26 percent of the group, fell as much as 3.3 percent in Stockholm.

Competition in the online fashion business is heating up, with the likes of Zalando SE and Asos Plc seeking to boost sales and profit while warding off competitors including Amazon.com Inc., whose Amazon Fashion site is expanding in Europe. Global Fashion Group is raising at least €300 million in the latest round, with Rocket Internet investing as much as €100 million and Kinnevik contributing €200 million.

“We’re excellently positioned in countries and regions where you see a massive shift from offline to online,” Global Fashion Group chief executive officer Romain Voog said by phone. He said he isn’t worried about the valuation change as peer multiples regularly fluctuate and Global Fashion Group is well-funded. “We want to have a very clear path on becoming a profitable company.”

Rocket declined six percent to €25.30 at 10:54 a.m. in Frankfurt, after falling as low as €24.69. Kinnevik lost 2.6 percent to 249 kronor in Stockholm.

Global Fashion Group combines six emerging-market retailers modeled after European incumbent Zalando — Dafiti in South America, India’s Jabong, Namshi in the Middle East, Russia’s Lamoda, Zalora in Southeast Asia and The Iconic in Australia. Global Fashion Group will use the funding to invest in brands, mobile technology and last-mile delivery to grow sales in its existing markets and further improve profitability, Voog said.

Global Fashion Group increased sales about 50 percent to €930 million last year and narrowed its loss margin by more than 10 percentage points in the first quarter, based on adjusted earnings before interest, taxes, depreciation and amortisation, Voog said.

By Stefan Nicola; editors: Anthony Palazzo and Ville Heiskanen.