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Rocket Internet narrows losses at main start-ups
[BERLIN] German e-commerce investor Rocket Internet said on Wednesday it had managed to rein in losses at its main start-ups and said it had plenty of cash to keep funding the businesses.
Founded in Berlin in 2007, Rocket has built up dozens of businesses ranging from online fashion to food delivery in a bid to replicate the success of Amazon and Alibaba in new markets.
As it seeks to prepare the start-ups for stock market listings and respond to investor concerns about mounting losses, it has shifted its focus towards turning its businesses profitable, even at the expense of slower revenue growth.
Rocket said aggregate revenue of selected companies grew by 31 per cent to 1.58 billion euros (S$2.4 billion) in the first nine months of the year, a slight slowdown from a growth rate of 32 per cent in the first half.
The aggregate adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) margin improved to a negative 17.5 per cent from negative 34.4 per cent a year ago, with 2.6 billion euros of cash still available.
Rocket has pledged that the 1 billion euros it burnt through in 2015 will mark a peak for losses and promises to make three start-ups profitable by the end of 2017.
Rocket's Global Fashion Group (GFG), which like Rocket is backed by investors Kinnevik of Sweden, last week reported that revenue growth slowed in the third quarter although its losses narrowed.