Rocket Internet sees "sluggish" growth in India
German e-commerce investor Rocket Internet AG, which this year sold Indian portfolio firms Jabong and FabFurnish, expects weak investment recovery from the South Asian country.
"In India, economic activity remains buoyant, but the growth forecast for 2016 and 2017 was trimmed slightly, reflecting a more sluggish investment recovery," the investor said in its half-yearly financial results of 2016.
Rocket Internet works on a simple formula—copy business models proven in a developed market like the US or a fast-growing market such as China and emulate them in other high-growth markets. It hires executives to run these businesses.
Rocket Internet made its debut investment in India nearly five years ago and has backed firms such as HeavenandHome, Printvenue, PricePanda, OfficeYes and 21Diamonds, among others. Printvenue's revenue fell in India, the financial results indicated without specifying the losses incurred.
Fashion e-tailer Jabong and furniture portal FabFurnish were sold in what can be called as distress sales. In July, Jabong was sold to Indian e-commerce firm Flipkart's fashion portal Myntra for a much tapered price of $70 million.
Globally, Rocket Internet has narrowed its losses with its key startups, going by the financial results. There was growth in sales at clothing retailer Global Fashion Group, food-tech firm Foodpanda and home-furnishing brand Westwing.
"We're very well progressing on our path to profitability," chief financial officer Peter Kimpel said on a call with reporters, a Bloomberg report said.
Rocket has started around 100 firms worldwide, with minority and majority stakes in its portfolio companies.
According to The Wall Street Journal, the company's IPO in 2014 was the biggest tech floatation in a decade in Germany.
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