If you thought the problems Rocket Internet has had bringing its portfolio of startups and its business overall into the black would have spelled setbacks for future investing, think again. This week, the firm — based out of Berlin — reported that it had raised a new $1 billion fund, the biggest tech fund of any VC firm to date in Europe, it claims.
The Rocket Internet Capital Partners fund, as it is called, will focus both on early and later stage investments, and marks a shift of sorts for Rocket Internet.
The company will put some of the investment into existing portfolio companies — the company is known for incubating and growing e-commerce businesses around the globe built on models usually pioneered by others (‘clones’ is the less charitable term you may have heard) — but it will also start making more investments in startups beyond those Rocket Internet itself had a hand in starting.
Earlier this month, Rocket Internet was part of a $100 million round for Funding Circle, the P2P lending startup based in London. A spokesperson said that it’s been making investments out of the fund for over a year now.
“RICP has made investments since its first closing in January 2016. The fund seeks to invest in key focus areas of the Internet sector including marketplaces, e-commerce, financial technology, software and travel. Among the investments are Rocket Internet founded companies as well as others,” said the spokesperson.
She declined to comment on which other companies are in the portfolio now or will be in the future, but some of that has been made public anyway. A few of its many recent investments, in addition to Funding Circle, include a seed round for recruitment service UShift; a large cash infusion of $365 million in the Global Fashion Group, an entity created by Rocket to merge several of its online fashion retailing properties under one umbrella (this is one of Rocket’s more problematic businesses and came as a down round); and a smaller round for CaterWings, a corporate catering service.
Despite issues Rocket Internet has had with existing portfolio companies and its own finances as a publicly traded company, it appears that investors still believe that in the long term, Rocket can provide decent returns. All it takes are a couple of big hits to shift the balance — and Rocket has, over its history, had enough of these with large sales to Groupon, eBay and others to give it a good track record.
In this latest fund, Rocket committed 14 percent of the total, or $140 million, while an unnamed “diverse group of global investors, including financial institutions, pension funds, asset managers, foundations and high net worth individuals” contributed the rest.
“RICP having reached the hard cap of $1 billion shows the strong interest of leading investors, who share the enthusiasm for the attractive investment opportunity RICP presents”, said Oliver Samwer, Rocket Internet’s CEO, in a statement.