Two Senior Managers Abandon Rocket’s Ship

Rocket Internet’s aspirations to soar amongst some of the biggest global tech firms appear to have taken another hit, as two of the company’s senior managers are departing from its ranks.

Sources close to the German company have told Reuters that Franziska Leonhardt, head of Rocket Internet’s legal department, and Uwe Gleitz, senior vice president of corporate finance, will soon be leaving Rocket Internet for personal reasons.

It’s the latest setback for what remains the biggest Internet firm in Europe, which Reuters notes has seen it share price fall by almost 50 percent since its IPO (which was spearheaded by Leonhardt and Gleitz) in October 2014. The company’s stock dropped another 0.2 percent on Tuesday.

Prior to Leonhardt and Gleitz’s announcement, Rocket Internet was already trying to fill the head of communications position, which has been vacant since Andreas Winiarski left the company last year.

Founded in 2007, Rocket’s plan to be a launching pad of sorts for startups worldwide has yet to produce any moneymakers (among the dozens of eCommerce sites it has gotten off the ground), which in turn has hurt the company’s plans for expansion. At one point, posits the Reuters story, Rocket Internet was thought to have the capability of competing with major players such as Amazon and Alibaba, as well as big venture capital firms.

A contributing factor to that forecast not having come pass is the fact that the market for tech IPOs is not as hot as it once was, a problem that has been made worse, sources tell Reuters, by conflict between Rocket and major Swedish investor Kinnevik.

Among the companies that Rocket Internet helped set up, the report continues, recipe and ingredients startup HelloFresh had its stock listing pulled on short notice in November; that situation, according to Reuters, was brought about in part by a disagreement between Kinnevik and Rocket CEO Oliver Samwer over HelloFresh’s valuation.

Similarly, Rocket’s plans to launch both food delivery company Delivery Hero and online furniture seller Westwing were put on hold last year.

Rocket is not alone in its recent struggles, as they are reflective of investors cooling on nascent tech firms throughout the industry. By example, Reuters shares that over the last few months, Fidelity and Blackrock have reduced their valuations of companies like Snapchat and Dropbox.

“The devaluations by Fidelity and Blackrock have sent a signal to the industry and are also being closely followed here,” Germany-based financing consultant Peter Barkow told the outlet.

Samwer, for his part, remains confident that the company’s startups will eventually find success on par with one of its earlier breakouts, the European online fashion site Zalando; having launched in 2008, that company is in the black and has seen its share price increase by more than 50 percent since 2014.

On the bright side for Rocket Internet is the fact that the company currently holds 1.7 billion euros in cash reserves, thus eliminating the need for it to immediately raise further capital.

Reuters adds that in September, Rocket forecast that three of its top online startups should break even by the end of 2017, and the company intends to list at least one in the next 18 months.

In an effort to help stem the current tide against it, Rocket has also pledged to raise no further capital from investors or make any major acquisitions over the next few years.