Why Rocket Internet Might Be Raising $1.1B

Rocket Internet, the Berlin, Germany-based “Internet company builder,” is reportedly raising money for a growth fund with a potential size of $1.1 billion (€1 billion).

The new growth fund, which would likely be called the “Rocket Internet Growth Fund,” will be managed by Rocket Internet CEO Oliver Samwer, who will be the fund’s sole general partner, according to German business publication Wirtschaftswoche.

While Rocket Internet declined to comment on such speculations, the launch of a new growth fund seems to be a strategic move for the company. With the backing of a beefed-up fund, the company could make heftier investments in late-stage funding rounds for companies across the globe, Tech.eu reported.

Reports of the growth fund are emerging at a time when the company’s stock price is slipping. Another major drop in stock was reported after the company went public in October last year.

Post-IPO, which valued the company at $8.4 billion (€6.7 billion), the company’s stock saw an immediate 10 percent drop in value. Nonetheless, the company recently reported that its portfolio has, in fact, grown by $2.5 billion (€2.3 billion) since the IPO.

The eCommerce startup incubator, which was started in 2007 by brothers Alexander, Marc and Oliver Samwer, has transformed itself into one of Europe’s most influential companies, with investments in top Internet companies like Groupon, eBay, Facebook and LinkedIn.

Though the company has long been criticized for duplicating U.S. startups like Airbnb and Groupon to propel its growth, Samwer sees it differently.

‘If there’s a clear business model that is proven to work, we will look at it,’’ he said in an interview. ‘‘Every new company is like a speedboat, and we want them to become aircraft carriers.’’

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