Rocket Internet set to raise $5bn for new ventures

Rocket Internet has gotten its shareholders’ approval on Tuesday to raise as much US$5 billion over the next five years to invest in new ventures and increase stakes in its existing startups.

This follows the company’s current holdings in more than 100 startups, in addition to big expansion plans.

It would be recalled that Rocket Internet raised 1.4 billion euros in a stock market listing in October and then just four months later asked investors for 588 million euros. The amount of capital it can now raise is equivalent to more than two thirds of its current market capitalization of around 6.4 billion euros.

Its voracious appetite for cash to fund its far-flung business investments sent its shares down to their recent lows. They currently trade more than 10 percent below the level where its initial public offering was priced in early October last year. They were down 3.6 percent by 9.06 a.m EDT, underperforming a broadly firmer German market.

At its first annual general meeting on Tuesday, Rocket asked shareholders for permission for a possible capital increase in the next five years of more than 2.5 billion euros based on its current share price.

The company also sought approval to issue a convertible bond of up to 2 billion euros by June 2020.

The two proposals were backed by 89 percent of shareholders represented at the meeting.

Peter Kimpel, Chief Financial Officer said any new capital would be used to invest in new companies, increase stakes in existing companies, build the technology platform and make acquisitions.

So far Rocket has ploughed the bulk of the money it has raised into investments in online takeaway food and grocery delivery startups that it says has created the largest takeout food delivery network outside China.

Oliver Samwer, chief executive, said Rocket Internet’s focus on emerging markets should provide encouraging prospects.

“Growth won’t slow, even after 20 years of the Internet. It’s just starting,” said Samwer, who has created and sold a string of Internet companies since the peak of the dot-com era in the late 1990s. “Growth is particularly strong in our markets because they are undeveloped.”