Gobi Partners, the sole Series A investor in Malaysian e-commerce startup Hermo, announced today it has sold its stake in the company to Tokyo-listed istyle inc.

istyle calls itself a market design company and is best known as the operator of the Japanese cosmetics e-commerce site Cosme.com.

Gobi says it sold its stake because of istyle’s ability to build international companies and its positioning in North Asia. Hermo is a cosmetics e-commerce site based in Johor Bahru, Malaysia and has made a name for itself as having top brands from Korea and Japan.

According to Gobi Partners, the firm is selling its stake for a 91 per cent internal rate of return. Gobi provided Hermo with US$2 million as the only investor in the startup’s Series A round. Hermo also received investments from Crystal Horse Investments and Tan Swee Yeong prior to the Series A.

Hermo grew by 300 per cent year-on-year in 2016, according to Gobi.

“I made the decision to have my company based in Johor Bahru, and I feel fortunate to have captured [Gobi’s] attention. Gobi’s assistance in making our platform an established e-commerce website as well as a household name was tremendously valuable for Hermo,” said Ian Chua, Hermo Co-founder, in an official statement.

Also Read: In Photos, this Singapore retail store sells only Kickstarter products

The acquisition was the result of talks between the parties about having istyle participate in a follow-on fundraising round.

“As the conversation deepened, it turned out that an acquisition made more sense as it came across as the most effective way to work on achieving our common vision. Hermo’s strong presence in Malaysia was also a major contributing factor,” said Kay-Mok Ku, Partner at Gobi Partners.

For Gobi’s Malaysian VC partner MAVCAP, the deal is the company’s first exit of the year and CEO Jamaludin Bujang said the acquisition shows another avenue for local companies trying to internationalise their brand.

“Our local companies can go international, if they are as understanding, hardworking and firm about providing good service to their customers as the Hermo team is. Deals like this show the world that Malaysian entrepreneurs are ready to take on the challenge of entering global markets,” he said.

Also Read: 3 lessons to learn from the shutdown of Indonesian e-commerce platform Cipika

Hermo was Founded by Ian Chua and P.S. Chong. Chua was named a Forbes 30 under 30 recipient in 2016.