Kinnevik reports €305 million investment in Samwer ventures, but Zalando makes loss


Kinnevik, the Swedish investment behemoth has released its 2011 year-end report – with figures that show it has invested heavily in the Rocket Internet empire. The figures also show that Zalando, Rocket Internet’s clothing and shoe retailer made an operating loss last year.



The Swedish funders, who own a 25% stake in Rocket have ploughed money into various Samwer ventures, including Home24, Wimdu and new arrivals Westwing and Pinspire.

Zalando, the Rocket Internet retailer gained  a whopping €95 million investment, bringing the Swedish investment in the company to €120 million.

Despite a growth of net sales from €159m in 2010 to €200m in the first half of 2011, the retail company has reported an operating loss, put down to “strong growth and geographical expansion”.

Zalando’s losses are down partly to a rapid expansion across Europe – into the UK, Austria, Italy and Switzerland, as well as opening its own logistics centre plus a new warehouse construction project in Erfurt to start operations in 2012.

This may explain why Russian VC and Facebook shareholder Yuri Milner has stalled on his company DST Global‘s major investment in a Samwer fund, instead opting for a four per cent stake in Zalando.

Zalando needs to keep up its rapid rate of expansion to enjoy economies of scale, whether it wil be able to achieve this momentum without Milner’s (and further) backing is debatable.

In its report Kinnevik said it “works closely with the founders of Rocket Internet in order to start up companies and develop them into leading Internet players. The main focus is consumer-oriented products with proven business concepts”. Or clones, as we like to call them.

The investment company acknowledged that expansion is “capital-intensive and competition is tough,” although growth potential is “significant”.

Talks of “a number of new companies in emerging markets” was mentioned as part of Rocket’s portfolio – as it expands into Russia and Brazil.

Image credit: flickr user Johnnytakespictures