German startup investor Rocket Internet has been struck by further setbacks, seeing two members of its senior management depart amid continuing stock decline.
The group will be losing the head of its legal department, Franziska Leonhardt, and Uwe Gleitz, senior vice president of corporate finance, while continuing to seek a replacement for its head of communications, Andreas Winiarski, who left last year.
This latest upheaval comes after a rumoured dispute in November between chief investor, Swedish company Kinnivek, over its decision to block the IPO listing of startup HelloFresh.
Following the disagreement, Kinnivek’s chief executive, Lorenzo Grabau, stepped away from the role of chairman in charge of Rocket’s supervisory board, replaced by Marcus Englert.
Further decline
Since Rocket claimed its own IPO in October 2014, in which Leonhardt and Gleitz reportedly played crucial roles, the firm’s share price has dropped from €42.50, to €23.33 last week.
This values the company and its assets at around €3.9 billion, going against Rocket’s own projected valuation of €6.1 billion in December last year.
The group’s chief executive, Oliver Samwer, said at the same time that it would stand by its objectives, which included operating losses for its ‘proven winners’, making one public within 18 months, and having three of its businesses break even within two years.
Fading ambitions
Despite Samwer’s show of optimism, investor doubts remain steadfast over Rocket’s ability to make improvements to profitability in 2016.
Rocket has been behind the growth of a number of e-commerce groups, including a handful of affiliate titles, and its rapid maneuvers into emerging markets saw it become a European favourite in the race against global tech giants like Amazon and Alibaba.
However, all of its current portfolio continue to operate at a loss, in part due to decreasing valuations of new tech companies by Fidelity and Blackrock, which have lead to an industry-wide precedent.
The company is therefore having to break further into its cash supplies to keep its companies in business, meaning a loss to its corporate finance team will be damaging.