Rocket Internet, the Berlin-based e-commerce incubator that has been behind dozens of startups around the world, is preparing to spin out a few more. The company today is announcing that it has raised another $500 million from two of its most regular previous investors, Kinnevik and Access, to continue funding more new ventures, as well as invest in the many it has already created. In a rare interview, Oliver Samwer, one of the brothers behind Rocket Internet, tells me that between 80% and 90% of the company?s new activities will continue to be geared at e-commerce, but it is also exploring other areas like travel as well.
There are currently 75 startups in operation worldwide ? fashion sites like Lamoda, Zalora and Zalando; payment ventures ike Payleven and Paymill; food operations like Food Panda ? employing some 20,000 people, with a projected collective turnover of $3 billion between them.
This latest funding takes Rocket to over $1 billion in backing for this year, after earlier revealing that it?s managed to amass $650 million to date (some of the big deals in that earlier tranche included Lazada getting $100 million; Lamoda picking up $130 million; and Zalora also getting $100 million).
In recent times, Rocket has been putting a lot of effort into building out ventures in emerging markets, tapping into countries where competitors like Amazon have yet to move. This is something that Samwer says they will continue to do. But this comes with more challenges ? working in faraway countries, and tapping into consumer tastes that have yet to be proven among them ? but Samwer focuses on something else. He tells me that the other attraction is the the higher margins that comes with offering services in places where there is little competition: ?If you look at the most successful mobile carriers, it?s the ones who have moved into emerging markets. In Brazil, for example, the margins for mobile carriers are higher than they are in Europe, so the complexity of entering that market is rewarded.? As with mobile businesses doing well in countries where fixed line penetration was low to begin with, the worse the existing retail infrastructure is, the more successful e-commerce is. ?People often refer to all these emerging markets as the ?rest of the world,? but we?re talking about 5 billion people here,? he says.
This does not mean that Rocket Internet will stop launching startups in Europe, but it?s more about trying this out for bigger moves elsewhere. ?Europe is a great testing ground,? he says. ?If something is successful here, we can take it to other markets.?
More to come. Release below.
Berlin, July 16th, 2013 ? Rocket Internet announced today that it has raised a total of USD 500 million from partners Investment AB Kinnevik and Access Industries since May 2012, representing the largest investment ever made in an internet incubator and accelerator company. The funds will be used to further expand Rocket Internet ?s world- wide network of successful internet start-ups.
Rocket Internet is the world?s leading internet incubator, bringing together the four elements required to create digital companies on a global basis: team, concept, technology, and capital. To date, Rocket Internet has started over 100 companies developing many of them across five continents. Rocket Internet?s core team of experts works with outstanding entrepreneurs, establishes new businesses, and then supports the new enterprises to maximize their growth. Rocket Internet ?s engineering work is primarily done in-house through its 250 dedicated IT engineers based in Rocket Internet?s corporate headquarters in Berlin and in various technology development centers throughout the world. Currently, Rocket Internet holds a significant interest in 75 ventures with 20,000 employees in over 50 countries world-wide.
Rocket Internet ?s strategy is to develop and support leading, highly innovative e- commerce companies in the fashion, general merchandise and furniture sectors. Rocket is targeting Europe, Russia, Latin America, Africa, the Middle East, India, South East Asia and Australia with its ventures ? covering in total five billion people and 60% of global GDP. Since 2010, Rocket Internet has helped to create and grow over a dozen leading e-commerce players including:
In the fashion ecommerce sector:
- Home 24, the leading online furniture site in Europe
- Mobly, the leading online furniture site in Latin America
- Westwing, the market leader for home & living in Europe, Russia and Latin
Other companies recently founded by Rocket Internet include (i) payment service provider and Red Herring award winner Paymill.com, (ii) Foodpanda.com, a fast growing food delivery service company currently available to three billion people in over 20 countries, and (iii) EasyTaxi, the market leader for online taxi booking in Latin America and Asia. Rocket also holds a participation in Zalando, Europe ?s largest online fashion company.
Rocket Internet companies are backed by leading global institutional investors and entrepreneurial families. Recent capital raises include (i) USD 100 million for 18 month old Zalora, market leader in online fashion in South East Asia, (ii) USD 100 million for year old Lazada, largest general merchandise ecommerce site in South East Asia, (iii) USD 130 million for two year old Lamoda, market leader in online fashion ecommerce in Russia, and (iv) USD 25 million for 18 month old The Iconic, market leader in fashion ecommerce in Australia. The Lamoda capital raise was the largest investment ever made in Russian ecommerce; the Zalora and Lazada investments were the largest ever made in internet companies in South East Asia. The Iconic capital raise was the largest investment ever in Australian ecommerce.
Oliver Samwer, Rocket Internet?s co-founder said: ?This is a highly significant investment from our partners Kinnevik and Access Industries. The additional capital supports our goal to be the world ?s largest and most successful creator of high impact companies in the internet space and reaffirms the confidence our investors have in our business. We will use the new capital to further strengthen our global presence while continuing to build successful companies together with great entrepreneurs.?
Rocket Internet was founded in 2007 by Alexander, Marc and Oliver Samwer. Investment AB Kinnevik and Access Industries became Rocket Internet investors and partners in 2008 and 2012, respectively. Rocket Internet is headquartered in Berlin, Germany, and operates 25 international offices in five continents.
Over the past 15 years, Rocket and/or the Samwer Brothers have created, developed, and successfully exited over 25 significant online businesses to leading international companies such as eBay, Groupon, Rakuten, and NBC Universal. They were also early investors in Facebook, LinkedIn, Eventbrite and many other successful internet companies.
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