German ecommerce firm Rocket Internet said it was on track to make three of its start-ups profitable by the end of 2017, and its losses should have peaked last year when its companies burned through 1 billion euros ($1.1 billion).
Revenue from its top companies, which range from online fashion to food delivery, rose 69 percent in 2015 to 2.4 billion euros. Their aggregate adjusted loss before interest, tax, depreciation and amortisation (EBITDA) was 1 billion euros, up from 600 million in 2014.
However, Rocket said the average adjusted EBITDA margin improved 6 percentage points to a negative 29.7 percent.
It reiterated that 2015 should represent the peak of the losses for its major start-ups and repeated a target that three of those firms should be profitable by the end of 2017.
Founded in Berlin by brothers Oliver, Alexander and Marc Samwer in 2007, Rocket has set up dozens of ecommerce sites, aiming to replicate the success of Amazon and Alibaba in Africa, Latin America and Russia.
Rocket Internet has seen its share price sag since it listed in Frankfurt in October 2014 on investor concern about the pace at which its start-ups are burning through cash.
The volatile stock was down 4.1 percent at 0705 GMT, reversing some of the gains it made this week after it sold a stake in one of the firms making the heaviest losses – Southeast Asian online retailer Lazada Group – to Alibaba.
Among its 14 biggest start-ups, Rocket Internet highlighted Middle East online fashion site Namshi and home furnishings retailer Westwing as making big strides towards profitability.
Chief Executive Oliver Samwer told journalists on a conference call that firms like Westwing and Russian online fashion firm Lamoda were reining in marketing and delivery costs due to “the benefits of scale”.
Rocket noted strong revenue growth at “ready to cook” meal delivery firm HelloFresh, seen as a likely candidate for a stock market listing, as well as at African online retailer Jumia, up 338 percent and 118 percent respectively.
However, Samwer said that a target set last September to list one of its start ups by early 2017 might have to be pushed back due to volatile markets.
Rocket said it had a cash balance of 1.8 billion euros at the end of 2015 and access to co-investment capital from a fund it set up in January, which had commitments of $742 million, up from a previous $420 million.Share This