Rocket Internet: The $8.2 Billion company, you’ve probably never even heard of…!
What is Rocket Internet?
Headquartered in Berlin and founded in 2007 – Rocket Internet is a start-up studio or a venture builder that builds online start-ups and also owns shareholdings in various models of internet retail businesses.
Rocket Internet basically, builds and / or invests in Internet companies who’s business model has been inspired by a proven online business model of a developed market, and adding it into new and fast-growing markets.
In other words,
- They identify proven business models that focus on basic needs
- Copy / Clone a website exactly (literally)
- Quickly build companies for these business models using highly optimized processes
- Transfer these proven business models to new, underserved or untapped markets
- And then scale these companies to a leading position in our markets
With a market value of approximately €8 Billion (2015) and a focus on Food & Groceries, Fashion, General Merchandise, Home & Living and Travel sectors; Rocket Internet owns a whopping 25% of the European unicorns, some of which include Foodpanda, Jabong.com, Lazada Group, Zalora, HelloFresh and Zalando, along with a network of companies operating in over 110 countries on 6 continents with more than 36,000 employees.
Some of their other famous clones include: – a few Clones of Amazon – Lazada (South East Asian market), Linio (Latin American countries), Jumia (Africa); Clone of PayPal – BillPay (Germany); Clones of eBay – Kaymu (Nigeria), Azmalo (Pakistan); Clone of eHarmony – eDarling (20+ countries); Clone of Uber – EasyTaxi (Latin America, Africa, and Asia); Clone of Pinterest – Pinspire; Clone of Airbnb – Wimdu; Clone of Groupon – CityDeal (16 Countries); etc…
As part of their global strategy, they have also created Regional Internet Groups in Africa (Africa Internet Group), Asia-Pacific (Asia Pacific Internet Group [APACIG]) and the Middle East (Middle East Internet Group [MEIG]), as well. This helps them with understanding the local markets, facilitating regional commerce, developing strategic and investment partnerships, in particular with mobile telecommunication providers, enable local recruiting and sourcing and accelerate the regional rollout of our companies.
What is the reason behind the success of their Business?
Well, there are many reasons that have driven Rocket Internet to its success!
To begin with – Entrepreneurs and Academics in the United States spend time and money to develop and establish new business models that capture value.
But Rocket Internet believes in otherwise!
Their business model itself, is to copy proven business models of successful American Internet companies in their given focus-areas and, paste the clone version of that business model in other markets where they don’t hold existence.
They believe in creating value by repetition! For them, Execution is more important than the Idea.
Commonest or simplest of ideas can create huge successes if executed rightly, whereas, the best of the ideas can become disasters, if not executed effectively.
Their platform rests on four pillars.
- Global Infrastructure
- Standardized Processes
- Proprietary Technology
- Network of Companies
To build this global network of companies, in many complex markets, Rocket Internet has developed a unique platform that systematizes and accelerates the process of identifying, building and scaling Internet companies.
To sum it all – it’s all about Execution!
Rocket Internet has successfully mastered the model of transforming and copy-pasting, and solving 95% of the problems that start-ups encounter during their growth phase, making their execution considerably more efficient than any “original” start-up!
Their success is mainly dependent on the successful Operating Model they have mastered, which they use while starting off. This model includes certain factors, such as: -
- Centralization: They are significantly able to achieve and complete more, by centralizing certain tasks at their headquarters in Berlin, for all their start-ups.This means that product development, user experience design, marketing campaigns and legal work are conducted by seasoned developers, designers and lawyers in Berlin. And once developed, all intellectual property are reused for future start-ups.But operations, sales and customer care are local and built on-site.
- Human Resources:Rocket Internet has streamlined and mastered the art of start-up HR process. Their formula is to hire managers from a handful of prestige firms such as McKinsey, BCG and Goldman Sachs for their management team, by offering them a comparable salary and a single digit in equity, thus, making them feel like entrepreneurs.
- Investments:They believe in keeping the operations process and fund-raising process separate. Founders usually are so occupied with raising round-after-round of financing that they get distracted from the focus. Hence, at Rocket Internet, the fund-raising process is left with the founder brothers, while the execution with the respective CEOs. And successfully, they have managed to collect over $2 billion from strategically beneficial investors from the specific markets.
- Recognition and Elimination of Failure: This is one of the most difficult and confusing tasks of any entrepreneurs life. Knowing when to quit! As much as, quick Rocket Internet are in starting a company, they are even quicker in eliminating the underperforming start-ups.
Who are their founders?
The company was founded by the Samwer brothers – Oliver, Marc and Alexander, and is now run by Oliver along with Marc and their Group MD – Alexander Kudlich
Oliver currently acts as the CEO of Rocket Internet!
He is the actual brain and muscle behind the success of Rocket Internet. As the CEO, he is responsible for Strategy Development and Implementation, Business Development and Investor Relations.
Born in Cologne in Germany in 1972; Oliver holds a degree in business administration from WHU – Otto Beisheim School of Management.
Straight after graduation, Oliver along with his two brothers founded Alando.de in 1999. Alando was a clone of eBay. In less than a year, they sold Alando.de to eBay Inc., and joined eBay as their Managing Director for Europe including – Germany, Switzerland and Austria.
After working with eBay for about a year, Oliver along with his brothers, then founded Jamba! / Jamster in 2000! After running that company for about 4 years, he then sold it to VeriSign Inc in 2004.
In 2005, the brothers then founded European Founders Fund / Global Founders Capital, a Venture Capital Firm to support the early stage start-ups. Alexander Samwer still continues to operate that.
In 2007, Oliver then founded Rocket Internet, and since then he has been actively and aggressively working on various Businesses that the company incubates.
Marc is the Co-CEO of Rocket Internet and helps Oliver in driving the company on the path to success!
Born in Cologne in Germany; after completing his Law from the University of Cologne, Marc has supported and been an active part of all the endeavours of Oliver.
Post his education, he cofounded Alando.de in 1999. Alando was a clone of eBay. In less than a year, they sold Alando.de to eBay Inc. and joined eBay as their Managing Director for Europe including – Germany, Switzerland and Austria.
After working with eBay for about a year, Marc along with his brothers, then founded Jamba! / Jamster in 2000! After running that company for about 4 years, they then sold it to VeriSign Inc in 2004.
In 2007, Marc along with his brothers founded Rocket Internet and since then has been aggressively working on to grow the company.
In 2010, after the sale of CityDeals to Groupon, Marc had also joined the company as their Managing Director for more than a year, as well.
Alexander is the Group Managing Director of Rocket Internet!
Born in Bonn in Germany in 1980; Alexander has completed his Business Administration with a specialization in Finance and Accounting from the University of St. Gallen in Switzerland.
In 2005, he also received a Master of Arts degree in Philosophy from the University College London, as well. Other than that, he also holds an MBA from the European School of Management and Technology too.
After completing his graduation from the University College London, Alexander started his career by joining Axel Springer AG as the Assistant to the Chairman and CEO – Dr. Mathias Döpfner.
Later, from 2008 to 2011, Alexander went on to work at several Managerial positions at Zanox.de AG (a group company of Axel Springer AG), which also included being the Regional Managing Director for Asia Pacific and Central and Eastern Europe.
Finally in 2011, Alexander joined Rocket Internet as the Group Managing Director and since then he has stuck to the firm and is now responsible for operations, product development, technology and resources.
How has their growth been so far?
Lead by Oliver, Rocket Internet has always been famous for their aggressive growth tactics, and taking businesses from their Idea stage to Billions of dollars in revenues, in just about under three years.
However, do not misconcept the tech company to be a newly born or a baby unicorn. In fact, the founders brothers—Oliver, Marc and Alexander Samwer, have been doing this since more than 15 years, before then even started Rocket Internet.
It all began with eBay!
During their stay in San Francisco in 1998, the brothers had noticed that eBay was widely popular in America and that it held huge potential in the German market as well.
Having said that, the brothers sent several emails to eBay suggesting them to establish an online auction platform in Germany, and that they should hire the brothers to run it there.
After a long wait, when they didn’t receive a reply, the brothers decided to take the matters in their own hands. They returned to Germany and started the suggested online marketplace called Alando.de, in 1999.
Believe it or not – within just 100 days of going live, the brothers managed to sell the Alando.de to eBay for a whooping £35 million, back then.
Post this massive deal, they were all over the papers! The New York Times ran a story about the Samwer brothers and Alando, and how they were inspiring the German start-ups ecosystem.
This deal also opened the German markets for the other major US tech firms and investors as well.
Later, after working with eBay for a year, the brothers then started Jamba! – a mobile-phone-content platform, where, again they managed to show their entrepreneurial skills by turning various adversities into opportunities!
Eventually, after successfully running the company for about 4 years, they sold Jamba! to VeriSign for a whooping £176 million in 2004.
This sale was a proof of their concept, their no-nonsense method!
Over the next few years, the brothers invested in various German clones of YouTube (MyVideo), Twitter (Frazr) and Facebook (StudiVZ), as well as other technology properties based on US models. And overall, they managed to taste success as well!
Post this, they took the next step, into the most successful period of their lives, and in 2007 founded Rocket Internet!
Since then, the company has managed to show and prove their extraordinary performance, time and again.
In 2014, Rocket Internet even changed its legal form from a GmbH (private limited company) to an AG (public limited company), and launched their IPO at the Frankfurt Stock Exchange. The same year, they also reported sales of $115.7 Million, as well. And later, last year, Rocket Internet further changed their legal form into an SE (Societas Europaea) as well.
The company was initially founded with their own money, but over the period of time they saw the incoming of more investors. As of date, Rocket Internet is divided amongst: Global Founders (38.1%), Kinnevik (13.2%), United Internet (8.3%), Baillie Gifford (6.8%), Philippine Long Distance Telephone Company (6.1%) and Access Industries (6.0%).
Today, they are valued at $8.2 Billion, have made 6 Acquisitions, have raised more than 1 Billion, and have invested in over 66 companies globally as well.