How much have Swedes Kinnevik invested in Rocket Internet to date? €1.1b and counting

Investment AB Kinnevik
Investment AB Kinnevik

Judging by their 2012 annual report, Swedish investment company AB Kinnevik‘s holdings in the portfolio of Berlin-based venture builder Rocket Internet are becoming more and more important…

In the past few years, Kinnevik’s investments in Rocket have increased to an impressive total of €1.1b, with the fair value of those shareholdings sitting at €1.6b. The Swedish investors were rewarded with a return of €113.4m last year.

Investment AB Kinnevik

Kinnevik President Mia Brunell Livfors and Chairman Cristina Stenbeck

To date, Kinnevik has backed numerous Rocket Internet companies – along with Zalando, Home24 and Wimdu, it holds shares in holding companies Bigfoot I (Dafiti, Lamoda and Namshi), Bigfoot II (The Iconic, Zalora along with parts of Zando and Jumia) and BigCommerce (Lazada, Linio and more shares in Namshi).

Zalando is the main focus

At the end of 2012, Zalando was valued at about €2.8b – of which Kinnevik has a 35 per cent stake.  The investors are definitely focusing on the online fashion giant. In October they took a ten per cent shareholding in Zalando – at a cost of €287m. Kinnevik now has the option of purchasing another three per cent shareholding in the company, for the price of €100m.

The investors announced in this latest report that they will be buying a package worth €41m, though the investment itself hasn’t been made yet. The decision on the remaining €59m is as yet undecided.

Glossybox – a clear loss of valuation

In the past year, Kinnevik increased its holdings in Beauty Trend Holding GmbH, the company name behind subscription beauty box service Glossybox. According to the report, it increased its holdings from 24 to 45 per cent – an interesting move considering that Glossybox’s valuation has sunk from almost €60m to only €30m.

Update: Glossybox tells us that Kinnevik misreported the share increase and has now corrected the figures in the annual report. The investor still holds 24 percent of Glossybox. This means the calculated valuation is only somewhat lower than the figure reported before.

The reason behind this drop in value is likely to be a mistaken takeover interest from the clone’s US inspiration, Birchbox. We hear that, in the meantime, the Berlin-based incubator has been trying to sell Glossybox country branches individually to local cosmetics firms – apparently with little success.

Now, according to our information from a country manager, Glossybox is planning a centralised management system for the globally-active company. This move is likely an effort to drive down the operation costs, which gives the rumours widespread redundancies are coming some credibility. Around €55m of capital has been invested in the business to date.

So far, Kinnevik has kept the shareholdings it has in the various Rocket Internet companies fairly even – between 30 and 40 per cent is the norm, at least in the larger eCommerce business or holding companies.

Kinnevik holds 36 per cent of Home24, which they valued at €250m. The investors also hold 41 per cent of Airbnb clone Wimdu, which could be a bad thing considering rumours the Samwers are struggling to sell it. Kinnevik’s shares in the three holding companies Bigfoot I, Bigfoot II and BigCommerce are 39 per cent, 44 per cent and 29 per cent, respectively.

A flood of money for Rocket

In the past year US investment bank JP Morgan has been making headline-grabbing investments in a number of Rocket portfolio companies. Tengelmann has also increased its investments significantly,

Still, Kinnevik remains one of the largest investors in the incubator and its portfolio companies. That said, in the past few months the Samwers have managed to win over new investors – including Summit Partners – to help fund their cost-intensive expansion. Almost weekly, new million-euro investments are announced.

Meanwhile, the Swedish investors are becoming increasingly dependent on the success of Rocket companies – more so than the incubator’s other investors, it seems.

One glance at the division of online investments made by Kinnevik last year and this becomes clear: of €810m worth of investments, a huge €793m went to Rocket Internet portfolio companies.

This can only mean that the Swedes are hoping for a big success soon as, to date, their investments in Rocket have not been particularly rewarding, particularly considering the risks involved. Yes, the investor claims to have a focus on value-creation rather than exit strategies – but there’s no denying dividends alone won’t satisfy in the long-term…

Translated by Michelle Kuepper

For related posts, check out

Rocket Internet’s Linio raises €25m from Colombian beer barons
Rocket Internet’s “Asian Zalando” Zalora nets €20m from Tengelmann Group
The biggest German financing rounds of 2012