Rocket Internet explains how it managed to lose nearly $700m this year

German startup juggernaut Rocket Internet today gave an insight into the full extent of its financial performance in the first half of 2016. The company had, earlier this month, announced a US$691 million loss across its portfolio startups, but refrained from proffering specific details.

Most of Rocket’s troubles were blamed squarely on underperforming companies in its Global Fashion Group (GFG), of which Zalora is a part. Rocket reiterated this stance in a statement released today, explaining that “impairments at GFG weighed in on consolidated results.”

The fashion ecommerce wing contributed negative US$429 million to overall results, even if its revenues actually grew by 26 percent to settle at US$508 million, Rocket said. Gross profit was up by 31 percent year-on-year.

GFG’s last funding round of US$364 million in July means its cash position is strong, a figure that reflects in Rocket’s financial results. Net cash available for the group increased by 59 percent year-on-year.

Namshi, Rocket’s fashion ecommerce store for the Middle East, actually posted a slender profit of US$1.8 million this year, with net revenue increasing by 50 percent. Zalora, however, remains a fair distance away from this goal. Rocket clubbed it together with The Iconic, its equivalent in Australia, and announced a loss of US$35 million.

But it’s not all doom and gloom at the well-funded German incubator. Online food delivery startup Foodpanda witnessed a 72 percent increase in net revenue compared to the corresponding period last year. It announced a gross profit of US$23 million, an increase of 72.5 percent.

Overall, Foodpanda still registered a net loss of US$31 million, but that figure is down sharply from last year when it posted a loss of US$43.6 million.

“The first half 2016 results have shown that Rocket internet’s key portfolio companies continue to progress on their path to profitability,” said company CEO Oliver Samwer in a statement. “We are on track to meet our profitability targets, with at least three of our key portfolio companies turning profitable until the end of 2017.”

* Converted from Euro. EUR 1 = US$ 1.12

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from Tech in Asia https://www.techinasia.com/rocket-internet-results-h1-2016
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