Sept. 9 (Bloomberg) — Rocket Internet AG, the e-commerce investor founded by Germany’s Samwer brothers, plans to announce an initial public offering to raise about 750 million euros ($967 million) this week, according to people familiar with the matter.
The sale, which will comprise only new shares, could value Berlin-based Rocket Internet at about 5 billion euros, said the people, who asked not to be identified because the plan isn’t public. The company could announce the intention to float as early as tomorrow, though the timing and valuation haven’t been finalized, they said.
As one of Europe’s most closely watched technology IPOs this year, the proceeds will help Rocket Chief Executive Officer Oliver Samwer bring established online business models to markets outside the U.S. and China. Shoe and fashion retailer Zalando SE, which received initial funding from Rocket in 2008, announced its own plan to sell shares to the public on Sept. 3. Zalando is No. 9 in the Internet Retailer Europe 500.
“Zalando has to be a success in order to get Rocket’s IPO to work out as well,” said Heinz Steffen, an analyst at Fairesearch in Kronberg, Germany. “Rocket should be able to get a small premium versus what recent investors have paid. Whether the business itself merits the valuation is another question.”
In meetings with investors, Rocket has compared its business model with that of Jack Ma’s AlibabaGroup Holding Ltd., people familiar with the talks said in June. Alibaba, the Chinese e-commerce operator, plans to sell shares this month and is targeting a valuation of as much as $162.7 billion.
Brothers Marc, Oliver and Alexander Samwer have drawn criticism for cloning promising U.S. Internet businesses internationally. Since starting their first so-called dot-clone in 1999, a German version ofEBay Inc., they’ve duplicated sites such as those of Airbnb Inc., EHarmony Inc. and Pinterest Inc. Rocket typically starts the companies, hires staff and provides initial marketing, design and management know-how.
A test for Rocket’s valuation will be how it can translate sales growth into profit. Ten Rocket e-commerce startups for which shareholder Investment AB Kinnevik disclosed earnings — including Lamoda, Dafiti and Westwing — had an aggregate operating loss of 432 million euros last year on sales of 743 million euros, according to data compiled by Bloomberg based on a company report.
Philippine Long Distance Telephone Co. and Germany’s United Internet AG last month injected 768 million euros into Rocket. Rocket subsequently got a bigger hold on several of its investments in an deal that gave a 2.5 percent stake to Holtzbrinck Ventures GmbH.
After that transaction, Rocket’s largest shareholder was the Samwer brothers’ Global Founders Fund with a 52.3 percent stake. Kinnevik of Sweden held 18.1 percent, United Internet had 10.4 percent, Philippine Long Distance Telephone held 8.4 percent, and billionaire Len Blavatnik’s Access Industries had 8.3 percent.
A spokesman for Rocket Internet didn’t immediately return a call seeking comment.
Rocket announced last week it will combine five fashion e-commerce businesses to create a new global fashion e-commerce group that it will call GFG. The five companies are: Dafiti (Latin America), Jabong (India), Lamoda (Russia and former Soviet states such as Armenia and Moldova), Namshi (Middle East) and Zalora (South East Asia and Australia). Dafiti is No. 19 in the Latin America 500.
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