Rocket internet SE CEO Oliver Samwer is under pressure to find start-ups that can make his shareholders money. And it’s not about to become any easier.
Samwer will assume the chief financial officer post from October in addition to his CEO job, when current CFO Peter Kimpel leaves for Barclays Plc., it was announced last week. Holding both executive posts at the German tech factory only complicates his task.
“Investors now want to see Samwer write new success stories by starting or backing more companies that can succeed on a larger scale,” said Alexander Rummler, an analyst at Oddo BHF. “Having to shoulder two jobs will only increase the pressure on him.”
Ever since some of Samwer’s best bets went public starting last year — food delivery company Delivery Hero SE, meal kit service HelloFresh SE, and furniture retailer Home24 SE — there’s been little news on other potential hits. Meanwhile, Rocket’s cash pile of about 2.3 billion euros ($2.66 billion) sits mostly idle in the bank.
Samwer has a new strategy though: shifting Rocket to behave more like a venture capital firm, and relying less on its earlier model of cloning successful US internet companies.
Rocket says Kimpel, who helped engineer the company’s 2014 IPO, has formed an experienced finance and accounting team that will take much work off Sawmer’s shoulders. It would leave billionaire Samwer, who was one of the first backers of Zalando SE and helped it grow into Europe’s largest online fashion retailer, to focus his attention on repeating that success with some of the lesser-known start-ups his company is backing. Rocket owns about 60 per cent in Berlin-based InstaFreight — a platform that matches, via an app, truck drivers with excess capacity in their vehicles, and businesses who need to ship cargo. InstaFreight says it can save firms time and money by calculating a fixed price instantly, based on loading and unloading points as well as the type of cargo.
InstaFreight, founded in 2016 and now shipping across the EU, is an early-stage venture, having raised 8 million euros in a Series A round in November. But it operates in a global logistics market that will be worth $15.5 trillion by 2023, according to data compiled by Transparency Market Research.
Rocket knows food, having digitised deliveries and introducing meal kit services in many European markets and the US. While those models have focused on private consumers, Samwer is now looking at the B2C food sector.
Berlin-based Caterwings, 48 per cent owned by Rocket, is a marketplace that links caterers with corporate customers to provide services such as weekly lunches, and supply company parties with food trucks. The sector is tough: Caterwings has lost at least three executives over the past two years and is facing renewed competition from US rival EzCater, which last month bought Paris-based GoCater as it seeks to expand in Europe.
Spotcap provides short-term loans to small and medium-sized businesses in the UK, the Netherlands, Spain, Australia and New Zealand, promising companies faster access to money. It’s raised about 100 million euros in total, from Rocket (which owns about 40 per cent of the business) as well as others including Access Industries and Russian gambling and finance executive Oleg Boyko’s Finstar Financial Group.
But there’s strong competition from traditional banks and well-capitalised start-ups such as Funding Circle (in which Rocket owns 2.1 per cent).
A finger in many pies
* Rocket owns more than half of Berlin-based Pflegetiger, which employs full-time nurses and connects them with elderly people living in the German capital. Customers can book care specialists via phone or the internet to offer in-home help and shopping trips, to medical services such as injecting insulin or measuring blood pressure.
The market for elderly care is large and growing; Germany’s Federal Statistics Office expects the number of people requiring care will rise to about 3.4 million people in 2025, from about 2.6 million in 2014. But the industry is tightly regulated and Pflegetiger’s business model of employing nurses takes a lot of capital to scale. The start-up operates only in Berlin.
* Rocket owns a large majority stake in Expertlead, an e-recruiter that specialises in linking skilled freelance technology workers — such as software engineers, blockchain experts and data scientists — with start-ups and corporate customers requiring short-term expertise.
Expertlead puts its freelancers through standardised tests and tracks the progress they make at the companies they’re hired. Customers, which range from Alphabet Inc.’s Google and Deutsche Telekom AG, to Axel Springer SE, pay the freelancers by the hour. Demand for technology expertise is huge as Europe’s industry digitises, but Expertlead has to succeed against established rivals including LinkedIn Corp. and German peer Xing SE, which was founded in 2003 and sold shares in Frankfurt three years later.