Yesterday, Rocket Internet published its first full year financial report since their IPO in 2014. Although revenues have grown significantly (volume weighted net revenue growth of 82%) compared to 2013, Rocket Internet has also announced a total loss of €20.2 million for 2014; both revenue growth and net loss were not really unexpected.
The 174 pages of this annual report also revealed some interesting and unexpected things about the inner workings of Rocket Internet, a European company with goals to become the world’s largest internet platform outside of the United States and China. If you don’t want to read the full annual report, here are five of the most interesting things we found:
- Proven Winners – the good news: The average adjusted Ebitda of Rocket Internet’s ‘Proven Winners’, i.e. it’s most mature companies, has improved by 21% to -34%. One of Rockets most successful ‘Proven Winners’ seems to be HelloFresh. The food/recipe subscription business had the strongest revenue growth, with 380% compared to 2013.
- Relatively weak – still a winner?: A ‘Proven Winner’ that is seeming to struggle a bit is Linio. The Latin America-based e-commerce marketplace grew its net revenues between 2013 and 2014 by ‘only’ 29.3%, while it also increased its operating loss from €34.5 million in 2013 to €55.1 million in 2014.
- Not a winner at all: Wimdu, which was founded in 2010, has still not reached Rocket Internet’s ‘Proven Winners’ status. Instead, it is described within the annual report as one of Rockets ‘Emerging Stars’. The Airbnb clone increased its number of bookings by ‘only’ 31% compared to 2013. It seems that the company has already lost the race with Airbnb to become the worlds leading marketplace for short-term apartment rentals.
- Visits and head count: The total visits to Rocket websites and apps almost doubled in one year from 2.4 billion to 4.4 billion in 2014. Rocket Internet is now active in more than 110 countries on six continents and its network of companies now employs over 30,000 people (9,300 of them work in the Asia Pacific region). Rocket Internet increased its headcount between 2013 and 2014 by 98%.
- Nice compensation: The members of the management board (Oliver Samwer, Peter Kimpel and Alexander Kudlich) received remuneration in cash amounting to ~€1.13 million in 2014. In addition, they received ~5.45 million stock options with a grant date fair value of ~ €95,57 million.
Background info: Founded in 2007 and headquartered in Berlin, Rocket Internet is a giant company builder that identifies, builds and scales proven online business models through its global platform. The company’s CEO is Oliver Samwer, one of Germany’s most successful serial internet entrepreneurs.
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I would not buy the Stock, , maybe even short.