30-09-14-inside-the-rocket-internet-experience-david-neal
Business Management

Inside the Rocket Internet Experience

Rocket Internet is the Berlin-based VC and incubator that says it builds “winning ventures” and wants to be “the home screen of the world”. It has its fingers in a range of countries across various investment types and technologies and says it is the largest operation of its kind outside of China and the US. But it is not without its critics.

It may be the fact that its reach is so wide, that it has made an immediate and much felt impact on businesses like eBay, and that it has ruffled some internet establishment feathers through its approach. The firm itself is something of a compilation CD of businesses and investments, a highlights reel of successful operations in one package.

Rocket’s methods are controversial and it has been accused of being a clone factory, run with aggressive policies and moves that are designed to disrupt industries and lead to fast exits. Some might just call this ‘business’ but even if it does not appear to be making Rocket universal friends or admiration, this Swiss Army knife of technology investment appears to have a strong commercial instinct. In mid-August its resources were boosted with an investment from an enthusiastic United Internet AG, which gladly paid €435m ($563m) for a 10.7 percent stake in the business. This values the seven-year-old firm at about €4bn.

“We are very pleased to receive this vote of confidence in our ability to generate value from one of Europe’s most successful internet entrepreneurs and companies,” said Oliver Samwer, Rocket CEO and one if the three brothers who are the co-founders of the company, in a statement at the time.

What is it about Rocket? Is it just its approach or is it partly that it is German and therefore operates outside of the Silicon Valley bubble? Ahead of trading starting on 2nd October, Rocket declined to comment for this article, but it pointed me to a company in which it has a stake.

One of its most recent launches is a refined food delivery service with a marketplace that for now, is limited to the financial centre of London, but has solid expansion plans. Fittingly perhaps, the EatFirst food service was started and backed by Rocket and an investment banking veteran whose experience of the food market was limited to the eating, as opposed to serving, end.

Rahul Parekh, the friendly founder of EatFirst, said that during his time at Goldman Sachs he ate a lot of uninspiring lunches, often at his desk and often with compromises. EatFirst is the result of this.

“I spent 7.5 years at Goldman Sachs as a trader in London in equity derivatives and e-commerce [before] I decided to leave to start this business,” he tells me over a Skype call.

“Working in such a fast-paced City of London and in a demanding job, I always found it a constant struggle to eat well and fast… the only alternatives are unhealthy, low-quality takeaways or unvaried, repetitive high-street options.”

While the modern-day worker is faced with a beguiling range of sandwiches and lunch solutions, Parekh said that people are tired of the bread/filling/bread arrangements and are looking for new healthier alternatives.

“There’s only so many sandwiches you can eat from [sandwich chain] Pret-A-Manger, and myself and my colleagues were bored of the lunch options nearby,” he added. “It is hard to find the time to eat well and healthily”.

EatFirst is the answer to this and the alternative to the recently floated Just Eat which has a market cap of over £1.6bn ($2.7bn), but Parekh said that what is on offer with EatFirst is very different.

“I wanted to bring diverse cuisines, healthy recipes, a simple menu that changes every single day… but with lightning-fast delivery so even the busiest people could enjoy it within 15 minutes. Every day there will be new recipes, always great and always different cuisines. Take-up has been fantastic, people love our meals, and others keep asking us when we’re going to start delivering in their area.”

The Eat First story was cemented during a meeting between Parekh and Rocket’s CEO.

“I was working at Goldman at the time and met Oliver Samwer though some mutual contacts. We talked about the business idea and decided to launch it together. Rocket have been a great, great partner. We’ve learnt a lot from their experiences with other ventures such as foodpanda and Hello Fresh.” 

Parekh is unmoved by Rocket’s critics, saying that all businesses have rivals and competition.

“It’s like anything,” he says. “Goldman wasn’t the first bank in the world… was it a copycat?”

And anyway, he argues, Rocket offers a ‘can-do’ spirit of inspiration and significant financial resources.

“Rocket provides incredible training to young people and helps bring great companies to customers across the world,” he says. “Without Rocket there’s no way we could have launched so fast and have such a strong expansion plan.”

 

David Neal has been writing about technology since the Millennium Bug. He’s survived Alta Vista and the I Love You virus, and now works from his home in Kent.

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David Neal

David Neal has been writing about technology since the Millennium Bug. He’s survived Alta Vista and the I Love You virus, and now works from his home in Kent.

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