BERLIN — Rocket Internet, the Berlin-headquartered startup factory, reported losses of €741.5 million (£630 million) for 2016 on Tuesday as several companies in its portfolio struggle to become profitable.
Losses at Rocket, which invests in existing internet companies and builds some of its own, were almost four times higher than losses in 2015, when the company reported a loss of €197.8 million (£168 million).
Peter Kimpel, chief financial officer at Rocket, admitted that the latest set of financial results were “clearly disappointing,” according to The Financial Times.
Rocket went public in 2014 when it listed on the Frankfurt stock exchange. However, shares in the company have continued to slide as investors question the company’s strategy. Rocket’s shares were down 0.3% on Tuesday morning, trading at €16.30 (£13.86).
Rocket’s business model largely involves copying Silicon Valley startup ideas and deploying them through new companies in emerging markets like Latin America and Russia.
However, investors are concerned that several of the companies in Rocket’s portfolio will never turn a profit. Rocket has backed food delivery startups such as HelloFresh, Delivery Hero, EatFirst, and online fashion companies like Zalora and Lamoda. The majority of companies in Rocket’s portfolio continued to make a loss last year, according to The Financial Times.
One Rocket company tipped for a successful exit is Delivery Hero, which said on Monday that it is considering a stock market listing after reporting a 79% increase in full-year sales to €297 million (£252 million).
However, growth of HelloFresh, another one of Rocket’s big bets, slowed in 2016. “The deceleration in HelloFresh growth needs to be watched further in the upcoming quarters,” Alexander Rummler, an analyst at Otto Seydler Bank AG, said in an emailed note to Bloomberg.
“In 2016, our selected companies progressed on their path towards profitability, while demonstrating further growth,” Oliver Samwer, Rocket CEO, said in a statement.
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