Berlin-based start-up incubator Rocket Internet’s cash and cash equivalents increased nearly five times to euro 2,053.5 million in CY14 from euro 437.4 million a year ago, even as the company seeks to build a war chest to re-invest in its e-commerce start-ups.
Since 2007, Rocket Internet has launched more than 75 different start-ups, including online food ordering firm Foodpanda and fashion and lifestyle e-commerce portal Jabong.
In CY14, Rocket Internet fell in red with a net loss of euro 20.2 million compared to net income of euro 174.2 million in CY13. Earnings before interest and taxation declined to euro 17.4 million in CY14 from euro 187.2 million in CY13.
Sales, however, witnessed a 43.4% year-on-year growth from euro 72.5 million in CY13 to euro 104 million in CY14.
Also, negative cash flow from operating activities increased from euro 38.9 million in CY13 to euro 90.4 million in CY14.
Rocket Internet said this was a typical industry trend and attributed the increased cash outflow to start-up losses. For example, Rocket Internet said Foodpanda reported a loss in earnings before interest, tax, depreciation and amortisation (Ebitda) of euro 34 million.
“The business is in a high growth phase, investing heavily in marketing and its infrastructure. The focus is on capitalising on the huge online food market opportunity by acquiring customers and vendors, entering new cities, consolidating the position in existing markets and entering new markets,” it noted.
Foodpanda registered 8.7 million orders, garnering gross merchandise volume (GMV) of euro 117 million, reflecting a year-on-year growth of 430% and 386%, respectively. By the end of December 2014, Foodpanda had 46,000 restaurant partners. Net revenue increased 8.39% on a year-on-year basis to euro 6.7 million in CY14 with gross profit of euro 6.5 million in CY14, representing a margin of 97%.
“Foodpanda continues to benefit from strong investor interest in its business model. Following several successful funding rounds in 2014, it closed the year with a strong cash position of euro 44.5 million,” Rocket Internet said.
Jabong reported a loss in Ebitda as losses increased from Rs 246.1 crore in CY 13 to Rs 457.86 crore in CY 14. “The adjusted Ebitda margin improved by 12.5% points to -58% in 2014 driven by higher marketing efficiency and scale benefits”, reported Rocket Internet.
Jabong’s net revenue more than doubled from Rs 344.3 crore in CY 13 to Rs 811.4 crore in CY 14 due to an increase in product assortment, launch of international brands, and exclusive tie ups. Higher investments in IT and infrastructure contributed to an increase in capex from Rs 12.7 crore in CY 13 to Rs 39 crore in CY 14.
Jabong’s cash position reduced from Rs 853.2 crore in CY 13 to Rs 289.4 crore in CY 14.
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