19. April 2013–
Rocket Internet's Samwer Brothers have claimed that they want to "take down" Ikea and dwarf H&M in a controversial leaked document intended for investors.
It's a well-known fact that the Samwer brothers, the founders of Berlin-based venture builder Rocket Internet, have aggressive growth models for their ventures. But just how ambitious these plans are has been revealed in the latest issue of German magazine Manager, which uncovered confidential documents aimed at Rocket investors.
The documents include some massive promises from camp Rocket: the accelerator claims that almost all of its eCommerce ventures will be pushed to make billion-dollar turnovers and generate two-figure percentage returns on sales. Chain stores such as Zara or H&M will be insignificant in comparison to Zalando and, in typical Samwer fashion, the documents claim that Rocket will "take down" Swedish furniture giant Ikea.
These wild promises have apparently made Rocket an attractive investment opportunity – according to Manager magazine, Indian steel magnate Lakshmi Mittal has already invested some of his €5m fortune in Rocket Bigfoot I. This holding company includes Dafiti, Lamoda and parts of Namshi – Zalando’s sister company in Latin America, India, Russia and the Middle East.
Mittal is not alone; the magazine reported that Kurt Rudolf Schwarz, heir to German pharmaceutical giant Schwarz has invested €10m, Ukrainian billionaire Victor Pinchuk has donated €15m and an impressive €25m has come from Colombian financial manager and beer magnate Alejandro Santo Domingo. While these are significant individual investments, these numbers pale in comparison to the billion euro investment from Swedish VC Kinnevik.
Big investments, big losses
According to information from the documents, Zalando's Brazilian clone Dafiti will make around €2b in revenue in 2016 – in 2012, in comparison, it was €91m. The same can be said for Russian Zalando copycat Lamoda – revenue in 2016 is expected to be around €1.5m, a big jump from last year's €45m.
As for the young Latin American Amazon clone, Linio, 2017 is set to be a good year – with estimated revenues of €281m, the Samwers claim that the return on sales will be an impressive 12 per cent. This is a clear sign of the Samwers' huge and rather unrealistic ambitions: by comparison, the company's US original, Amazon, makes just over one per cent in returns.
It's no secret that Rocket Internet ventures need large funding amounts to launch: Manager magazine’s sources claim that South East Asian fashion portal Zalora made a loss of close to €70m last year, while furniture chain Home24 also has high deficits – in 2012 it made a loss of close to €40m, and a loss of around €43m is expected for 2013.
Translated by Michelle Kuepper