Careers at Rocket Internet
Rocket Internet’s mission is to become the world's largest Internet platform outside the United States and China.
The Samwer brothers (Oliver, Alexander, and Marc) of Germany all had an interest in starting a business. In 1998 they had an inspiration – why not take an existing company’s idea and do something similar? They decided to copy eBay’s model, and launched a company called Alando in early 1999, with funding help from one of Oliver’s old professors. eBay got wind of the company, and opted to avoid the competition by purchasing it for $43 million. Oliver became employed by the retail giant, taking on a role as a Managing Director for the German-language market.
Oliver left eBay and in 2000 he and his brothers launched ringtone provider Jamba, also inspired by an existing idea. This was followed by a sale to Verisign four years later for $273 million. The Samwers then established the European Founders Fund, a VC company that invested in startups. Their success with the copycat model led them to found Rocket Internet in 2007. The sole purpose of the new venture would be to identify successful companies and duplicate their business model in markets where it didn’t yet exist. Its category was known as “startup studio” or “venture builder”.
Rocket Internet focused its operations outside the United States and China. It targeted mobile and online retail services in five consumer industries: Fashion, Home & Living, Travel, Food & Groceries, and General Merchandise. It offered office space to the new businesses it launched, in addition to marketing services, IT support, and investor access. One of the first firms it founded was Zalando, a shoe seller inspired by Zappos. Others included Lazada (inspired by Amazon), BillPay (PayPal), EasyTaxi (Uber), and Pinspire (Pinterest). The strategy earned the firm the label of “clone factory.”
Rocket Internet became hugely successful; in 2013 alone the company and its many ventures combined raised $2 billion. In 2014 it carried out a victorious initial public offering. The firm now has businesses operating in more than 110 countries in six continents with over 36,000 workers. As of April 2015, its market value was said to be €8 billion.
Business model of Rocket Internet
Rocket Internet has a niche market business model, with a specialized customer segment. The firm markets its services to new businesses with offerings falling within its areas of interest (Food, Fashion, Travel, Home, General Merchandise) and that are seeking funding assistance and personalized support.
Rocket Internet offers five primary value propositions: accessibility, cost reduction, performance, risk reduction, and brand/status.
The company creates accessibility by offering new businesses more than just funding assistance. It takes an active role in their development by providing them with access to its many resources, including its technology platform, marketing support, and investor network. This gives the firms a competitive advantage over most startups, which are usually built independently.
The company is able to reduce upfront expenses. It has a massive global infrastructure, with 30,000 employees in 110 countries. This feature enables it to build new firms in difficult markets at low cost.
The company has demonstrated strong performance. It has a set of standardized processes that have proven effective. This feature allows it to build firms in a quick and repeatable way, as it is typically able to launch a new company in fewer than 100 days and rapidly internationalize its model.
The company’s strategy reduces risks. It only invests in models that have demonstrated success in other markets. It then coaches the founders of the ventures to ensure they have the necessary skills to continue. Finally, the ventures can tap into its funding network throughout the process. All of these factors significantly increase the probability of the startups achieving success.
The company has established a strong brand. It has launched numerous companies through its efforts, giving it an impressive track record. It is well-known in the VC industry and differentiates itself through its business model and “first mover” positioning.
Rocket Internet’s main channel is its investment team, which actively seeks businesses for potential funding. The company promotes its service through its website, social media pages, and attendance at various conferences and forums.
Rocket Internet’s customer relationship is primarily of a dedicated personal assistance nature. The company works closely with startups to help them get off the ground, providing a wide variety of services and funding throughout the development process.
Rocket Internet’s business model entails maintaining its platform and providing its advisory services to its customers, new startups.
Rocket Internet maintains strategic partnerships with various groups that provide significant operational, financial, and strategic support:
Telecommunications Providers – Partners include United Internet, MTN, Philippine Long Distance Telephone Company, Millicom, and Ooredoo. The company benefits from their billing relationships, mobile subscriber base, physical distribution network, customer relationship infrastructure, text message marketing knowledge, and pre-installation of Rocket Internet’s mobile apps on handsets.
Technology Companies – Partners include Google, Criteo, Facebook, Responsys, Rackspace, and Salesforce. They complement Rocket Internet’s technology platform and offer its startup customers competitively-priced technology, online advertising, and other services.
Industry Partners – Partners include Tesco, Axa, Kering, and Tengelmann.
Financial Investors – Partners include Access Industries, Kinnevik, and Holtzbrinck.
Rocket Internet’s main resource is its proprietary software platform, which its startup clients are given access to for their online businesses. The platform features plug-and-play options for practically any type of Internet business model, as well as industry-specific solutions. The company also has valuable human resources in the form of its functional experts, who maintain significant knowledge in search engine optimization, search engine marketing, customer relationship management, business intelligence, product design, online marketing, and information technology. Lastly, as a startup itself it has relied heavily on funding from outside parties, raising $1.12 billion from three investors as of February 2015.
Rocket Internet has a value-driven structure, aiming to offer a premium proposition through significant personal service and enhancements to its technology. Its biggest cost driver is marketing, a fixed cost. Other major drivers are legal and information technology expenses, both fixed costs.
Rocket Internet has two revenue streams:
Product Revenues – Revenues the company generates by taking a portion of earnings from online and mobile sales of the goods offered by its clients.
Service Revenues – Revenue the company generates by charging its clients for intermediation, consulting, and other services.
info: Oliver earned an MBA from WHU – Otto Beisheim School of Management and also attended Kellogg Graduate School of Management. He previously served as CEO of Jamba and as a Managing Director at eBay. He is a Co-Founder of Global Founders Capital.
info: Peter earned an MBA from WHU – Otto Beisheim School of Management. He previously served as a Managing Director at Goldman Sachs in Frankfurt and London. He leads the areas of finance, legal, investor relations, risk & compliance, and internal audit.
info: Johannes earned an M.A. in Economics at the University of St. Andrews and a Ph.D. in Economics at the University of Hamburg. He previously served as a Managing Director at Rocket Internet, an Industry Manager at Google, and as the Founder of Getupp.
info: Alexander earned an M.A. in Philosophy from the University College London and an MBA from the European School of Management and Technology. He previously served as a Regional Managing Director of Axel Springer as well as its CEO.
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