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Rocket Internet expects start-ups to turn profitable in 2018
November 30, 2017 / 8:49 AM / 12 days ago

Rocket Internet expects start-ups to turn profitable in 2018

BERLIN (Reuters) - German ecommerce investor Rocket Internet pushed into 2018 a target to turn a profit at some of its leading start-ups as it reported a 28 percent jump in nine-month revenue on Thursday.

The logo of of Rocket Internet, a German venture capital group is pictured in this September 24, 2014 illustration photo in Sarajevo. REUTERS/Dado Ruvic/Files

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 percent at 0809 GMT.

Speaking ahead of an investor day in London, Kimpel said Rocket Internet was well able to finance ongoing losses with 1.9 billion euros ($2.26 billion) in gross cash and other bank deposits as of the end of October, plus an additional 1 billion 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 1.85 billion euros and a consolidated loss of 44 million, down from 642 million 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 2.3 million euros.

However, Rocket’s other furniture business Home24 might need to explore raising more funds, he said, as it currently has 16 million euros in cash but lost 6 million in the third quarter.

African ecommerce business Jumia is also still burning through cash, losing 28.5 million in the quarter on turnover up 19 percent to 20 million euros.

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 17 million euros.

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 percent rise in net revenue.

($1 = 0.8425 euros)

Reporting by Emma Thomasson; editing by Maria Sheahan and Jason Neely

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