Rocket Internet must prepare for a new stage

Rocket Internet presented the results of 2019 Q1 on May 29. Analysts think that the internet company should prepare for the next stage.

In Latin America, before Amazon or Uber, there was Linio and Easy Taxi. These companies started thanks to the capital of Rocket Internet, like 200 others that began operations in emerging market economies.

Innovative, risky, or disruptive. These three qualifiers, common in accelerators, incubators or venture capital funds, are not part of the Rocket Internet vocabulary. The German firm takes successful ideas in the United States and creates local competitors in non-English speaking markets. Sometimes, it forces the original companies to buy their copycats: eBay bought its clone Alando for $50M; Groupon did the same with CityDeal, and Zynga bought Plinga.

The founders of Rocket Internet are three German brothers: Oliver, Alexander and Marc Samwer. They accept their lack of originality. Oliver declared for Wired in 2012: “We are companies builders, we are not innovators. Someone else is the architect. We are the builders. “

In the beginning, many entrepreneurs criticized the company for its lack of originality, like Jason Calacanis, who said, “The Samwer brothers are despicable thieves.” However, at least in Latin America, they promoted e-commerce, gave experience to entrepreneurs, and conditioned the field so that other global competitors could enter in a more developed market.

The model enthralled investors, and in 2014, Rocket Internet went public. However, the company stagnated two years later, and many of its companies lost money. This situation forced them to sell their stake in several companies, which allowed them to recover the profit margin.

For analysts, the next step of the company should be to become private again, since as a public company it has not created value for its shareholders and has given it little room for maneuver.