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Rocket Internet Slashes Home24 Value in New Funding Round

Rocket Internet has lowered the value of one of its key portfolio companies by more than 50 percent in a new financing round, the latest setback the Berlin-based startup incubator.
Rocket Internet | Source: Reuters
By
  • Bloomberg

BERLIN, Germany — Rocket Internet, known for cloning the business models of Silicon Valley companies, has lowered the value of one of its key portfolio companies by more than 50 percent in a new financing round, the latest setback the Berlin-based startup incubator.

Home24, an online furniture retailer that is 42.9 percent owned by Rocket, raised 20 million euros ($22.7 million) from investors including Rocket and Scottish asset management firm Baillie Gifford, according to a statement Wednesday from Rocket.

The down round for Home24 comes a week after a Rocket profit warning caused by the writedown of another high-profile portfolio company, Global Fashion Group, and is likely to raise further questions about Rocket’s valuation techniques and business model. Home24 is now valued at 420 million euros, versus a previous 981 million-euro valuation Rocket based on a financing round in March. Rocket had branded Home24 one of its “proven winners” — a term the incubator uses for its investments with the most potential for an initial public offering or successful sale.

Rocket is investing 1.4 million euros in Home24 in the current round, it said in a statement. The investment reduces Rocket’s total stake in the company to 42.9 percent from 44.6 percent previously.

Philipp Kreibohm, a founder of Home24, said in the statement the company is "paving the way towards profitability” and will invest the money in its logistics network and technology.

Oliver Samwer, Rocket's founder and chief executive officer, said Home24 was now "well positioned to reach its strategic goals."

Rocket advanced 1 percent Wednesday to close at 18.85 euros in Germany, before the announcement. The stock has dropped 33 percent this year.

By Jeremy Kahn; editors: Nate Lanxon & Anthony Palazzo.

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