More about Rocket Internet

I have written about RI here when I was wondering about their high cash burn rate; basically they used all of the IPO proceeds to buy other internet companies, mostly recently founded start-ups such as Delivery Hero.

RI’s results are out and, unsurprisingly, it shows a loss of EUR 20mln for 2014. This doesn’t sound to bad, but I have zero confidence in this numbers, since many participations are not fully consolidated and Rocket Internet’s holding structure looks like those of a Russian Oligarch tying to hide his traces (here, also read the interesting comment section). Meaningless, basically.

And then…they did it again!

By they I am referring to Delivery Hero, the company founded in 2011 that RI was happy to pay a hefty price for, from the article,

(…)Delivery Hero, a company in which Rocket holds a minority stake, announced the acquisition of the Turkish food delivery brand Yemeksepeti today, in a transaction valued at $589m (…)

Yep, Delivery Hero which RI was happy to value @ EUR 1.5bn way, way back in autumn, just bought a Turkish Internet company at a hefty price. I am absolutely sure that these guys have no clue about the currency risk they are taking.

While it might be true that RI at the beginning was quite successful copying successful US concepts, that is not what they do anymore. Now they buy companies that buy other companies…

Does anyone seriously believe this can work?


Read this excellent post (ht creditbubblestocks) for more color on the VC madness in tech.



  1. Just had a look at Ciscos numbers from 1995:

    They had net income of 125mln (up from 84mln in 94) on Sales of 500mln, i.e. a NI margin of 25(!) percent..

    Also their shares outstanding do not grow as quickly as those @ RI.
    I also doubt the BS was as intransparent
    No similarities here…
    Nothing against reinventing oneself, but not with OPM…

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