Technology Investments

The Startup Break Up

  • Why it matters

    Why it matters

    The Swedish investor’s announcement has dealt a blow to Rocket Internet, which has long been regarded as one of the biggest players in Berlin’s technology startup sector.

  • Facts


    • Kinnevik was Rocket Internet’s biggest investor after its founders, brothers Oliver, Marc and Alexander Samwer.
    • Rocket Internet was founded in 2007 and went public in 2014.
    • The German company has launched dozens of startups and is best known for setting up Zalando, Europe’s largest online fashion retailer.
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CEO Samwer of Rocket Internet walks to the podium during their shareholder meeting in Berlin
Rocket Internet CEO Oliver Samwer, pictured at an investor meeting, and Swedish investors Kinnevik have grown apart. Source: Reuters

Joakim Andersson, interim head of Sweden’s Kinnevik, said the investment company was cutting its stake in Berlin-based startup incubator Rocket Internet because there was a growing conflict of interest between the two companies.

“Our business models have become too similar. Rocket isn’t just building up young companies any more, it’s also investing in larger companies. We’re doing the same thing,” he said.

He added that the main aim in selling the shares was to realize a profit. “The investment in Rocket was fantastic. We increased our initial investment six-fold.”

Kinnevik announced Wednesday that it was cutting its stake in Rocket Internet by half, leaving analysts wondering: Is this the end of a marriage? A sign that Oliver Samwer’s charisma is waning?

The announcement certainly marks a dramatic shift in the relationship between Rocket Internet’s Oliver Samwer and Cristina Stenbeck, heir to the Swedish family company Kinnevik

Kinnevik, which made a fortune in the paper and wood trade, first invested in the Berlin-based Rocket Internet in 2010 and, with Mr. Samwer’s help, built up a portfolio of e-commerce companies. Kinnevik and Rocket together invested in Europe’s largest online fashion retailer Zalando and its clone for developing countries, the Global Fashion Group. With Ms. Stenbeck’s money, Mr. Samwer’s staff built up marketplaces in Africa, as well as creating the online furniture stores Westwing and Home 24.

“Our business models have become too similar. Rocket isn't just building up young companies any more, it's also investing in larger companies. We're doing the same thing.”

Joakim Andersson, interim head of Kinnevik

But the relationship has grown uneasy.

The share price has actually been suffering for some time. Shareholders are waiting for success stories, but none of the larger companies in Rocket’s empire have managed to break even to date. Rocket is using the funds from its IPO in 2014 to build up startups and get them ready for a flotation, although it has also begun to invest in third-party companies. Investors have been waiting in vain for a repeat of the success achieved by Zalando since it went public in 2014, from which Kinnevik has benefited considerably.

Kinnevik’s relationship with Rocket is also thought to have become distant, with the Swedish group giving up its two seats on the German company’s supervisory board last summer. It made two new digital investments last year without the involvement of Rocket.

Mr. Andersson has no interest in harming Mr. Samwer – after all, the Swedish group still owns more than 6 percent of Rocket. The two partners will still be closely linked through joint investments, such as the Global Fashion Group, in which they each invested over €300 million ($317 million) last year.

“We will continue to work together on the investments that we own jointly,” said Peter Kimpel, chief financial officer at Rocket, in an interview with Handelsblatt. “It’s a good partnership,” Mr. Andersson said. It sounds a bit like parents trying to explain to their children that their marriage is over, but that they still respect each other.

There is actually no need to worry about either party for the time being. Oliver Samwer has just set up a growth fund, for which he has raised $1 billion from investors around the world. He no longer needs Ms. Stenbeck’s money. Meanwhile, Kinnevik has built up its own online business expertise over the years and wants to focus on areas beyond e-commerce in future. “Our main focus for new investments will be startups in the fields of education, health and finance,” Mr. Andersson said.

The problem is that at Rocket there are currently no signs of a clear investment focus. The new fund has spent very little so far, and there is little talk of new ventures; where there is, the choice of areas seems to be somewhat arbitrary, although it seems food and fashion will once again be the center of attention in the coming months.

Oliver Samwer has promised his shareholders that three of his largest investments will turn a profit by the end of the year.

The biggest hopes lie with Delivery Hero, a pizza delivery service in which Rocket Internet is the biggest shareholder, and which had been expected to break even by the end of last year. However, that was before the company acquired its rival Foodpanda in December. Kinnevik had invested in Berlin-based Foodpanda, along with Rocket and other investors.

Although the integration is expected to take some time, market players are anticipating a flotation this year. With stock markets currently performing well, economic growth surpassing expectations and profits exceeding forecasts, anything else would be a surprise.

That is what Mr. Samwer will be judged by, not his relationship with Cristina Stenbeck. Or, as one observer in investment circles put it: “The marriage between the two was at least as surprising as the separation is now.”



Miriam Schröder is based in Berlin and covers the city’s startup scene. Robert Landgraf is Handelsblatt’s chief correspondent for the financial markets. To contact the authors: and


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