Rocket Internet, which is also based in Berlin, is set to be listed on the Entry Standard of the Frankfurt Stock Exchange before the end of this year. Reportedly, the company is planning to float initially between 10 and 15 percent of the capital, seeking a valuation of around €5 billion. One or more secondary issues are expected later on.
The six existing shareholders, including the three founding Samwer brothers and Kinnevik, would not sell any of their shares. Instead, the group wants to raise about €750 million in new equity to help finance its further growth, including the acquisition of new shares in existing internet operations and the start-up of new ventures. It wants to become the world's largest internet platform outside China and the U.S.
Founded in 2007, Rocket Internet was the original incubator of Zalando, which was described at the time as a European copy of Zappos. It's just one of 75 different websites created by the company in 40 different countries and many of them have been subsequently sold to other investors. Rocket Internet has already received around €1 billion in new equity since 2011 through various funding rounds. According to reports, the brothers Oliver, Marc and Alexander Samwer, who run the company, control 52 percent of Rocket Internet's shares through their investment vehicle, Global Founders. Kinnevik, the biggest investor in Zalando, had a stake of 25.1 percent at last report. Other major shareholders were, until recently, Access Industries, Summit Partners, Verlinvest, the Ontario Teachers' Pension Plan and Tengelmann.
In a prelude to a possible IPO, a German investor, Ralph Dommermuth, reportedly acquired a 10.7 percent interest in Rocket Internet a few days ago for €435 million, becoming apparently the second-largest shareholder. He owns a 40 percent stake in United Internet, a company with stock market capitalization of €6 billion that owns various other internet-related operations including Web.de and GMX.
Rocket Internet has operations in about 100 countries. Prior to the announcement of its IPO, Rocket Internet grouped together its investments in five major online retailers other than Zalando into a new fashion-related e-commerce company called Global Fashion Group, or GFG. The five retailers are Dafiti, which operates in Brazil and other Latin American countries, Lamoda in Russia, Jabong in India, Namshi for the Middle East and Zalora for Southeast Asia and Australia.
Unlike Zalando, these five websites are said to be still losing money, according to a report. They employ some 7,000 people. In the first six months of this year, they generated a turnover of €406 million. They counted 353 million unique visitors and received 8.4 million orders during the period. By the end of June, they had a total of 4.6 million active customers.
According to Rocket Internet, there are more than 2.5 billion people living in the 23 countries covered by GFG, who spend an estimated €330 billion a year on all kinds of fashion products, and more and more of them will purchase them online.