Rocket Internet expects start-ups to turn profitable in 2018

  • TECH
  • Thursday, 30 Nov 2017

Kimpel said Rocket Internet was well able to finance ongoing losses with

BERLIN: German e-commerce investor Rocket Internet pushed into 2018 a target to turn a profit at some of its leading start-ups as it reported a 28% jump in nine-month revenue on Thursday.

Rocket had aimed to have three of its start-ups profitable by the end of 2017, but finance chief Peter Kimpel told journalists that may slip "by a couple of quarters".

Its volatile shares, supported in recent months by the successful flotation of its biggest companies HelloFresh and Delivery Hero, were down 2.8% at 0809 GMT.

Speaking ahead of an investor day in London, Kimpel said Rocket Internet was well able to finance ongoing losses with €1.9bil (RM9.2bil) in gross cash and other bank deposits as of the end of October, plus an additional US$1bil (RM4.09bil) in cash at its major start-ups.

Rocket Internet, which invests in businesses from fashion and furniture e-commerce to food delivery, reported aggregate nine-month sales of €1.85bil (RM8.96bil) and a consolidated loss of €44mil (RM213.1mil), down from €642mil (RM3.1bil)  a year ago.

Home furnishings site Westwing moved closer to profitability in the third quarter, Kimpel noted, cutting its adjusted loss before interest, taxation, depreciation and amortisation to €2.3mil (RM11.44mil).

However, Rocket's other furniture business Home24 might need to explore raising more funds, he said, as it currently has €16mil (RM77.4mil)  in cash but lost €6mil (RM29mil) in the third quarter.

African e-commerce business Jumia is also still burning through cash, losing €28.5mil (RM137.9mil) in the quarter on turnover up 19% to €20mil (RM96.8mil) .

HelloFresh and Delivery Hero had already reported quarterly figures when Delivery Hero reiterated a goal to break even in 2018 and turn a profit in 2019 while HelloFresh narrowed its adjusted loss to €17mil (RM82.3mil).

Global Fashion Group, an emerging markets fashion retailer set up by Rocket and Swedish investor Kinnevik, reported a smaller third-quarter operating loss and a 19% rise in net revenue. — Reuters
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