Category Archives: Germany

Kinnevik earns $220mln from partial Rocket stake sale

Shares in the German e-commerce company Rocket Internet fell 14% after its main investor sold half its stake as the two firms have been increasingly becoming competitors. Sweden’s Kinnevik, which clashed with Rocket last year over the valuations of some of their joint investments, sold a 6.6% stake in Rocket at 19.25 euros per share, netting $220 million. Rocket Internet will not receive any proceeds from the transaction.

Berlin-headquartered Rocket Internet was founded in 2007. It has built up several businesses from fashion e-commerce to food delivery, but its shares have slid in the last year because many investors have become concerned about hight losses and falling valuations for its key start-ups. The company is facing heat from its investors due to continuous losses and a decline in revenue of its portfolio companies globally. Rocket Internet’s experience in India, for example, is far from being profitable. It made bigger bets on food-tech venture Foodpanda, fashion e-tailer Jabong and furniture portal FabFurnish. Most ventures quickly expanded in the beginning, but later started to struggle to survive. Last year, Rocket Internet sold Jabong and FabFurnish in misery sales. Last year Future Group acquired FabFurnish.com in an all-cash deal and Jabong was sold to Indian e-commerce firm Flipkart’s fashion portal Myntra for $70 million.

Kinnevik was one of the first investors in Rocket and was its biggest shareholder after the Samwer brothers who founded it and who have a 37%stake. Kinnevik also owns stakes in several Rocket’s major startups. There is a very high probability that Kinnevik will sell its remaining stake in Rocket because Kinnevik and Rocket are potential competitors for new investments. There might be conflicts of interest as Rocket moves from an initial attention on setting up new online businesses to being more of an investment firm with a model identic to Kinnevik’s. Kinnevik has not invested with Rocket in its food holdings, which now justifies the enormity of its valuation after it made a big push into the sector in 2015, a shift away from its preliminary attention on ecommerce in emerging markets.

Meanwhile, even as Rocket Internet has struggled with its bets on Indian companies, it has collected $1 billion in a new fund to support Internet companies globally. The Rocket Internet Capital Partners fund is Europe’s biggest fund concentrated on the Internet sector. The new fund will make early-stage and growth-equity investments in high-growth Internet-related businesses. It plans to invest in key attention fields of the Internet sector including marketplaces, e-commerce, financial technology, software and travel. The fund gained essential support from a diverse group of global investors, including financial organizations, pension funds, asset managers, foundations and wealthy individuals.

German government will punish social networking sites for publication of false news

The German coalition government announced that from next year it will introduce legislation imposing on social networking sites fines for publishing false information in them. The fine’s value may reach even 500 000 euros.

Announcement of the new regulations appeared in the commentary of Thomas Oppermann, the head of the parliamentary club of the SPD German party, for the weekly Der Spiegel. According to plans, in 2017 Germany will apply the law, according to which Facebook and other social platforms will be responsible for removal in time of information appearing on these sites.

The dominant market social media platform, such as Facebook, will be obliged to open special offices in Germany, operating around the clock, 365 days a year, exclusively engaged in identifying false information provided by various sources in these sites. If the website does not respond within 24 hours by removing false content, it will be charged a financial penalty. According to the plans of the German government, the fine imposed on social media website for negligence in removing “fake news” might reach the amount of 500 thousand euros.

Answering Der Spiegel’s question, Facebook has ensured that it seriously treats the issue of publishing deceitful information. It assured that it will be in constant contact with German authorities in the fight against false news. It will consult with experts and the government to work out together an effective mechanism for removal of content that may mislead public opinion.

Foodpanda got sold to Delivery Hero

In its history this startup gathered $ 318 million, including $ 100 million from Goldman Sachs. On the other hand Delivery Hero, which bought Foodpanda shares from Rocket Internet, earned a total of $ 1.33 billion. Another consolidation on the market of on-line food ordering, during which a larger giant acquires a smaller giant. The objective? To gain exposure to Asian markets, where Foodpanda has developed widely.

The terms of the acquisition remain undisclosed. The transaction is expected to close before the end of 2016. Yet, it is known that Foodpanda will add 20 new countries in Eastern Europe, MENA and Asia to Delivery Hero’s portfolio. So far it has been processing about 2 million orders per month within 22 countries, claiming to be the market leader in 17 of them. The combined group is supposed to process over 20 million orders across 47 countries per month.

Both, Delivery Hero and Foodpanda, are headquartered in Berlin and started very much as rivals. Nowadays Europe is home to many active international firms in the online food takeaway industry. They are counting on their local bounds, established customer relations and widespread restaurant networks to eliminate new competition.

Startup bank N26 expands into 9 European countries

The company, formerly known as Number26, now offers accounts in 17 European countries. Bank-based mobile application extends its services to Belgium, Estonia, Finland, Latvia, Lithuania, Luxembourg, Netherlands, Portugal and Slovenia.

Like the Atom Bank in the UK and GoBank in the United States, N26 is a fully mobile bank. Opening an account takes only eight minutes and this can be done by downloading the application on your device running iOS or Android. Customer identification is performed by a video call and requires to show your passport. After verification, the customer can transfer money to a free bank account and receive a MasterCard card.

The Bank currently operates in Germany, Austria, France, Spain, Italy, Greece, Ireland and Slovakia. In France, the use of bank services is currently limited, but probably will be again fully open in February.

N26 has received a banking license in July and has acquired over 200 000 customers in eight markets. The Bank says that its goal is to provide services to all Europeans over the next few years.

Netflix aims to have 100 million users outside the United States. It may enter to Poland in 2015.

In 2020 Netflix wants to have 104 million users in markets outside the United States. In Poland, the service may be launched in the first quarter of 2015.

After 7 years from the start in a particular country, Netflix will be present there in every third home – such an ambitious plan has been announced at the conference CTAM EuroSummit by Reed Hastings, chief of the service. Hastings was referring to markets outside the United States, where Netflix has been launched. On the basis of these predictions, it can be calculated that in 2020 the service will have about 104 million users living outside the United States. According to these estimates, in six years the highest number of users will be in Brazil (24.4 million), Germany (11.3 million, the service there was launched only in September), Mexico (over 10 million), the UK (9.5 million) and in France (8.3 million).

Currently, the largest number of the service users, a population of 36 million, lives in the United States. However, Netflix is still looking for new markets – in addition to those of Germany and France, it has been launched in Luxembourg, Belgium, Austria and Switzerland.

In some countries the viewers are disappointed because they are unable to find a few of their favorite TV series (for each of the markets Netflix resources are slightly different due to local agreements on emission rights and copyrights).

According to unofficial information, Netfix may enter to Poland already be in the first quarter of 2015. Polish broadcasters and TV operators are worried that Netflix can dominate Polish VoD industry and lead to significant reshuffle in the market.

When Netflix started in 1998 as a DVD rental service ordered by e-mail, it was hard to imagine that in the future it could beat market video services giants, like HBO. Also significant is the fact that the success as a video streaming service, Netflix achieved in just seven years, from the time when it began to deal with this activity in 2007.