Berlin-based startup Rocket Internet plans to use fresh capital to massively expand its business in growth markets such as Latin America and Asia. The company, owned by the three Samwer brothers Marc, Oliver and Alexander, has attracted investments of around a billion dollars (just over 764 million euros) since the start of the year, co-founder Oliver Samwer told news agency dpa on Tuesday. Samwer also defended the company’s sometimes criticized business model.
Various investors put $650 million into individual Rocket startups. In addition, about 400 million for the parent company was raised last week from the two big backers Kinnevik and Access.
"The money will be used primarily for Rocket Internet’s international expansion," Samwer explained. "We are focusing primarily on countries outside the U.S. and China, where the greatest growth in Internet penetration is expected over the next five years.
"That’s why Rocket is now active not only in Europe, but also in Latin America, Southeast Asia, India, Russia, Australia, Africa and the Middle East," he said.
Rocket Internet says it currently has stakes in 75 companies in 50 countries, with a total of around 20,000 employees. The startup developer founded by brothers Marc, Oliver and Alexander Samwer is particularly focused on online commerce, such as with German fashion site Zalando, as well as similar sites in Russia, Asia, the Middle East and Africa. The group also includes food delivery services such as Foodpanda and payment service providers such as Payleven and Paymill.
The business model of incubators like Rocket is to develop Internet companies and then take them public or sell them. But his investors, such as Kinnevik and Access, have staying power and are not pushing for a quick return, Samwer stressed. "We avoid short-term thinking investors like hedge funds. A long breath is rewarded."
In the past, Rocket has been repeatedly criticized for copying the business ideas of American companies for its own startups. Zalando, for example, is leaning on U.S. retailer Zappos. Samwer rejected these accusations, saying, "New companies always build on business models that already existed somewhere in the world." While there are very few "Einstein entrepreneurs" such as the inventor of the light bulb or the telephone, he said. "But 99 percent of the time, it’s the execution of the idea that decides the outcome. In the end, what matters is not whether I was the first to come up with an idea, but building a company that exists for the long term and satisfies customers."