Rocket Internet’s ‘softly-softly’ approach towards driving profit to its internet start-ups looks to have come at a cost, as a portfolio of its food takeaway businesses have been sold to Just Eat for a mere €125 million.
Today (February 5) sees La Nevera Roja (Spain), Pizzabo and hellofood Italy (Italy), foodpanda Brazil and foodpanda Mexico flee the nest in a bid to “reduce complexity”.
The company adds that all of the departing assets are “non-core operations” and “not market-leading”, according to a statement issued on its blog.
That still does little to quell doubts over the firm’s ability to turn its host of start-ups into financially-sound enterprises. Most of the company’s 34 businesses run at a loss, and plans to have at least three of these break even within the next two years will do little to impact events such as the €20.2 million Rocket Internet lost in 2014.
A key “divestment”
The news from today is significant, not least due to food takeaway businesses such as foodpanda allowing the Berlin-based Rocket Internet to build up plenty of hype around Europe.
Foodpanda is live in 26 markets across Asia, Europe, Latin America and the Middle East. Its commission-driven model has afforded it the labelling of a ‘proven winner’ by Rocket Internet, whose CEO – Oliver Samwer – is keen to stay active in the food takeaway market.
“The online takeaway market remains a core focus of Rocket Internet’s business strategy with the significant ownership in the market leaders Delivery Hero and foodpanda,” he commented
“Today’s transactions are clearly aimed at reducing the complexity of Rocket Internet’s network of companies.”
Ralf Wenzel, co-founder and CEO of foodpanda, added that a “divestment” in Latin America, where Just Eat will control the company in two markets, will allow a greater level of focus to be applied elsewhere.
That said, the decision to move away from established markets like Brazil and Mexico provides a test to Rocket Internet’s claims that it boasts a “truly global network of success stories”.
Just Eat is currently available in 15 countries worldwide, which doesn’t include where it controls assets such as foodpanda.