Rocket Internet – the Samwer brothers’ famous Berlin incubator – is netting $200 million from US billionaire Len Blavatnik’s Access Industries, industry sources report.
In terms of direct investment, that sum would place Access Industries second behind Swedish investment company Kinnevik, who spent a record €300m on Rocket Internet and its portfolio companies in the last quarter alone.
Blavatnik’s blessing – about $200m
Industry sources suggest that Oliver Samwer had some influential fundraising help in recent efforts from Goldman Sachs. That Sachs link is likely to have come about through Yuri Milner’s Digital Sky Technologies (DST) – investors both in Rocket’s Zalando and in Facebook and ZocDoc alongside Goldman Sachs, as documents leaked to Vertical Media earlier this year reveal. DST is said to have turned down a direct investment in Rocket itself.
The Russian/American investor and Harvard Business School graduate has a personal fortune placed at $11.9 billion and is No 72 on the Forbes list and No 6 on the UK Times’ Rich List (he is based in Kensington in London). Blavatnik made his fortune through founding Access Industries in 1986, investing in a diverse portfolio such as oil, coal, petrochemicals and real estate before moving into telecommunications and media, as well as post-communist Russian investments.
The connections that made it happen
At our Heureka! conference on Monday, Passion Capital’s Stefan Glänzer admitted knowledge of a $200 million financing round for Rocket, but would not divulge who was making the investment. Anonymous sources have now confirmed that Blavatnik’s Access Industries has sunk the funds into Rocket (approx €155m) in exchange for an undisclosed number of shares in the Berlin incubator.
Glänzer’s London connection may have given him the inside scoop on the deal. Glanzer and Blavatnik mostly conduct business from the UK capital and have a shared link in Alex Zubillaga, who invested with Glänzer in Mendeley and who is also Executive VP at Warner Music Group, which Access Industries bought last year for $3.3 billion.
Zubillaga is also supposed to have been supportive during Blavatnik’s 50 million investment in Rebate Networks, the cloning machine from Stefan Glänzer and Michael Brehm. Jörg Mohaupt, a member of Access Industries’ board since 2007, is also supposed to have been involved in the Rocket deal says a source.
The Blavatnik and Samwer history
Blavatnik already has a history of more tentative investments in Rocket properties. In March, he sunk funds into Glossybox, the BirchBox clone, and received seven per cent of the company, and further Samwer clones Pinspire and WestWing show funding from Access Industries.
It seems that both parties have been circling around one another through smaller investments, before entering a more significant deal together. Blavatnik is an especially attrctive investor for the Samwer clan as he has access to a nine-figure fortune and would allow the three serial founders to operate in relative freedom. As one of our sources puts it: “Blavatnik is attractive for the Samwers, because he sends money and keeps his mouth shut.”
Rocket funds heading for the billion
The last major (and only) Rocket Internet investment came from the Swedish investment company AB Kinnevik, with the quarterly report stating that Kinnevik sunk €300 million in the first quarter of 2012 and now has a total of €700 million invested in Rocket Internet.
This fresh injection of capital from Blavatnik’s Access Industries brings Rocket Internet to a total funding volume of around €855 million – heading close to the €1bn mark. This would put Rocket as one of the most significant incubators not only in Germany, but in the whole of Europe and cements its place as an industry leader. Above all, it seems plausible that Len Blavatnik has secured the specific options that could bring him more Rocket shares, so that Rocket may soon crack the magic billion mark.
Rocket headed for more international rollouts?
Rocket director Alexander Kudlich reeled off a series of numbers at Heureka! that now seem even more significant. Worldwide, Rocket has already created more than 15,000 jobs and 2,500 so far in 2012. The incubator also claims to have established at least 140 companies with an exit rate of 25 per cent.
The company is definitely focused on rapid expansion, especially on international rollouts of existing products. We have already reported on Rocket’s ambitions in Southeast Asia, South America, MENA and Turkey, and given this enormous financing round it looks like Rocket could be unstoppable in these territories.
With so much capital backing, Rocket looks set to win any costly marketing battles in new territories. Klaus Hommels could be right in his assessment naming Oliver Samwer as founder of the decade: “I have respect for the way in which Oliver and Rocket build operational excellence with the company. This is the real foundation of Rocket Internet for me.”