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.
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.
One of the leading global online food delivery services Foodpanda, according to Serbian startup blog Start-it, acquired leading Serbian online food service delivery company Donesi.com.
As stated on their company site, Foodpanda is present in over 35 countries in the world, and also part of the well-known Rocket Internet company from Berlin, Germany. On the other side, Donesi.com is one of the most popular Internet brands in Serbia, founded by Ivana and Vladan Zirojević, offering online food deliver service in the last 8 years and having thousands of happy customers and having cooperation with many restaurants. Donesi.com is also present in ex-Yugoslavian region with sites covering major cities in Bosnia and Herzegovina and Croatia.
Foodpanda came to ex-Yugoslavian region in the beginning of 2014 (we also covered it), and as usual invested a lot in promotion, also in TV ads, during FIFA World Cup. However, it seems they realized, that it would be more useful to acquire company such as Donesi.com as Foodpanda is also present since beginning of 2014. also in Croatia.
Online food delivery market showed some very large acquisitions in recent period from different companies as it is very competitive market.
Startups FoodPanda and its affiliated brand HelloFood have been a big success since their incubation from Rocket and become one of the leading global services in online food delivery. Covering a staggering 40 markets today, FoodPanda is also partnered with over 22,000 restaurants.
Since the initial launch this startup and its affiliates have raised over $48 million in investments, with the latest $20 million coming from Phenomen Ventures and others. This infusion will aid in the launch of this service in the upcoming weeks on new markets including: Croatia, Bulgaria, Serbia, Slovenia, Kazakhstan, Azerbaijan, Tanzania, and Uganda.
FoodPanda is competing against several big, already set, services such as Just-Eat and Delivery Hero, but it is gaining an edge due to its focus on the countries in the SEEMEA region.