German #startup factory Rocket Internet announced today financial results for some of its portfolio startups in the first nine months of 2016.
The earnings statement touts several achievements, such as improving profit margins and net revenue, bragging that selected companies have reached record revenue in the year so far.
But a cursory reference much lower down points to a darker reality: the well-funded firm – which runs a number of startups such as Foodpanda, Zalora, and Daraz – lost US$682 million in the first nine months of 2016.
It had issued a warning to this effect in September, saying fair-value adjustments would impact its financial position.
Rocket Internet says it has US$1.7 billion in the bank.
Rocket attributes most of the loss to a slump in the value of its fashion ecommerce startups, which were collectively downgraded by more than US$2 billion earlier this year.
“We have respectively been impacted primarily by deconsolidation of subsidiaries and impairment-related charges of associated companies,” said a Rocket Internet representative.
It’s not short on cash, however, with US$1.7 billion in the bank and a further US$1.16 billion available at the portfolio startups.
It’s impossible to get a grip on the entire spectrum of Rocket’s financial performance. That’s because it only released earnings figures for nine startups, out of a total of over 100 in its global network.
Foodpanda saw net revenue grow to US$34.6 million in the first nine months of the year, up by 102.3 percent from the corresponding period last year. Overall, it lost a total of US$43 million.
Jumia, Rocket’s online store for African markets, saw net revenue decline sharply to US$57.8 million, down 52.4 percent from the same time last year. Its overall loss was recorded at US$81.1 million.
Last week, Rocket said its Global Fashion Group had lost US$106 million in 2016 so far. That includes startups like Zalora and Namshi.
Rocket Internet shares closed yesterday at US$19.10, down more than 50 percent from the IPO debut of US$39.31.
“The operating progress accomplished by our selected companies translates into continued growth and much improved margins,” said Oliver Samwer, Rocket Internet’s CEO, in an emailed statement.
*Converted from Euro. US$1 = EUR 0.89.