Samwer Empire

Web Pioneers Rocket Into Stock Market, But Where Will the Money Go?

Rocket Internet Samwers-Nick Wilson credit
The stars of the internet (from left to right) Alexander, Oliver and Marc Samwer.
  • Why it matters

    Why it matters

    Rocket Internet is at the forefront of the online retail market, having launched competitors to nearly all major online concepts ranging from clothing and furniture retailers to dating sites. Its future is inextricably linked with the success of online retailers over bricks-and-mortar chains.

  • Facts

    Facts

    • Rocket Internet, founded in 2007, could be valued at an estimated €4 billion and online retailer Zalando at €3.5 billion if they go public in the autumn.
    • The Samwer brothers Oliver, Alexander and Marc started in 1999 by launching auction site Alando, which was sold to Ebay within four months.
    • A review of 10 major startups launched by Rocket Internet found the group posted a total operating loss of €431 million in 2013.
  • Audio

    Audio

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Oliver Samwer is unapologetic about his approach. “I’m not here to make friends,” he told a consumer goods forum in Paris in mid-June. “Retail stores are a relic from the time of Christ’s birth.” They only exist, he added “because there was no Internet at the time – but that doesn’t mean they have a right to exist.”

Oliver Samwer left his audience with one message: “You should leave this room very paranoid.”

The empire of Rocket Internet, the venture capital firm founded by the Samwer brothers Oliver, Alexander and Marc in Berlin, stretches across the globe, wherever they they see an opportunity to make money. They were early investors in Facebook, LinkedIn and Groupon, created Europe’s largest online clothing retailer in Zalando, and have rolled out countless other e-commerce start-up hopefuls around the world.

The stratospheric rise of the Samwer brothers is unmatched in recent years. Now the three brothers are planning to bring Rocket Internet and Zalando to the stock market. The two companies are together valued at nearly €8 billion ($10.5 billion) and the brothers’ shares are expected to be valued at a total of nearly €3 billion.

An initial public offering could come to fruition as early as autumn. Before Rocket Internet goes public, the company will be converted from a German to a European listed firm, according to sources, and then be listed on the Frankfurt stock exchange.

An Opaque Maze Of Business Interests

Nobody has been more successful, nor has any company been more controversial on the European Internet start-up scene. Yet an investigation conducted by Wirtschaftswoche and German public television station ZDF found the Samwer brothers’ business methods straddle the gray area between cunning and cleverness on the one hand and immorality on the other.

Rocket Internet is an opaque maze of businesses spread out across five continents, troubled by conflicts of interest and the oversized influence of its largest shareholders. Above all, the venture capital firm is placing a massive bet on the future of online retail.

And it still has to prove the companies it has founded can actually make a profit. A review of 10 Rocket Internet-founded firms revealed a combined operating loss of €431 million in 2013.

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