Readers, since my last post a lot of things have happened. It clearly is the last 6 months of the year as news keeps breaking, Amazon launches new product after new product, Alibaba is still to IPO etc. Over the last 2 weeks, 2 companies have been on my mind: Rocket Internet and Wayfair. Both are in the process of raising funding and both operate in 2 verticals that are not dominated by Amazon.
Wayfair in my mind is an example of 2 founders that understood the market and benefits of having a central business before anyone else did. Let us be honest, Wayfair started as a collection of niche ecommerce businesses that consolidated into CSN Stores and then into what we all know as Wayfair. Think about this – in 2011 when this company announced that they did a $1 billion in total sales I remember seeing a lot of posts about “who is this company”. Well fast forward 3 years and we have the IPO of a Boston behemoth that is going to be a big vertical business that will make things difficult for Amazon, eBay, Etsy and One Kings Lane. What is interesting to note is how little VC investment they have taken as well as how much control the founders have. I think their IPO will be a success (In ecommerce terms they will be known as the company that IPO’d before Alibaba).
Well, what can I say about Rocket Internet. They are one of the few companies that I know of that is able to add $1 billion to their valuation inside 7 days. Clearly something is going on at the German incubator as they have sold 20% of their business to 2 investors. First they sell 10% to the Philippines Long Distance Telephone (PLDT) company which valued the business at $4.5 billion. In less than 7 days they sold an additional 10% to United Internet from Germany at a valuation of $5.7 billion. Just when we all thought the selling off of parts of Rocket Internet companies were complete, they announce a consolidation of shares with existing shareholder (Holtzbrick Ventures) which leads to Holtzbrick Ventures owning 2.5% of Rocket Internet. Are we going to see the much anticipated Rocket Internet IPO?