I'm by no means an expert in any of this but the impression I took away was that while they did some really impressive things, all their companies had a fatal flaw.
The impressive things were:
- They had a common tech stack that while no means elegant was at least effective at getting to decent scale quickly
- They clearly had marketing and growth talent to also scale up businesses quickly
- They had expertise in specific geographies that are often difficult like South America, Europe, and China (these are difficult at least from the perspective of an American :) )
But the fatal flaw all their companies have, by design, is that they are really good at cloning a product and not good at actually creating one. Every company was clearly designed to be acquired before that problem became insurmountable.
If the acquisition didn't happen, turning a several hundred person organization into one good at figuring out what changes to make to a product to make it successful is...messy.
From my experience Foodpanda's biggest problem was tech. They literally had hundreds of servers be knocked off line because one redis server with session data went down. This was considered acceptable within the company. There was a culture of failure. And the business side had these issues too. There was a write up in an Indian newspaper where they basically got tore to shreads for all their failures publically. Turned out half of the company didn't realise how bad things were.
Foodpanda was Rocket's attempt at buying up competitors and dominating India. They literally bought everyone and still lost the war to dominate food ordering in India.
I was familiarized with Foodpanda in the early days, and their first months with dev in Berlin. I was also quite familiarized with Rocket (worked there for a while on their core platforms - both ecommerce and marketplace), and while my opinion about their design (on ecommerce) is far from good,their code and procedures were at a level of maturity far more advanced than Foodpanda.
That is not necessarily a bad thing, in startups of this kind you need to be able to refocus priorities and quickly test new markets. With this comes pressure to implement changes and twisting the product to fit a different goal thought on the initial design. In the end, you usually work a PoC as a product for some years until you have a complete grasp of where your business fits. Some challenges may look unexpected (such as the street naming and numbering somewhere in South America, maybe Colombia?), some challenges can be a bit more predictable (such as an appropriate redis configuration), but these growth pains are expected. One way I've seen working quite well to avoid that feeling of "drifting around" product teams have during this trial periods is to have clear, in-person communication from the top down, and include the product teams in the refocus process, so everyone is on the same page, and the business can decide also based on other factors such as cost of implementation and time to market. And I've seen this on a Rocket venture :)
They definitely seemed to have a culture of well...internal chaos. But that jives with their "copy fast" mentality. It's worked at least a couple times, right?
Yea, HelloFresh seems to be doing well and Zalando dominates in fashion. There are probably a few others doing well too.
More importantly though, I am really impressed and surprised by some of the research coming out of Zalando. Flair has some great ideas (especially at the time of release, when there weren't pretrained huggingface models for everything to build upon) and a really well-written paper. Colleagues also have had a good experience using the software and achieved very results with adapted NED tasks.
Also, Foodpanda's plan when I was there was IPO.
It was designed specifically to allow quickly rolling out to many different countries each having possibly different business logic.
Rocket Internet is known for doing pretty much what the quote in the article has "What they're doing is totally legal and totally immoral." How they operate is rather well known.
 what a name
Brain drain in tech is a big issue in Europe due to salaries paid in SV, not everything bad for the individual is actually a bad deal for the country.
Anecdotally, the amount of European programmers I know that moved to the US slightly exceeds the amount of American programmers that moved to Europe. I strongly doubt a different visa system would impact that significantly.
Everyone knows US pays more, but you are left in the dirt when something goes wrong.
People stay mostly here since there is work enough, friend & fault is here, travel between countries is easy, pay isn't bad and you get a decent healthcare.
Some people work in the US for a couple of years, but all the ones I know come back ( outside IT I have seen some friends going to the US)
I've been in Berlin for a number of years and have always liked the idea of Estonia, how did you go about finding a job working for the government? is speaking English OK?
Which other ones besides DAFT are you referring to? I think all of them that I have read about(Portugal, Malta, Cyprus) require hundreds of thousand of Euros no?
They were the founders of Jamba, a notorious company specialized in selling ringtone subscriptions for 3 to 5 Euro per month (called "Jamba Sparabo"). This may have well been the most hated company in Germany in the early 2000s.
According to the article, the investors have the right but NOT the obligation to sell their shares at the tender price. They might trust the company's governance less after de-listing, but it doesn't appear they're being forced to sell.
Apologies if this is discussed in the article, it's partially behind a paywall.
It's not like you have any more control if the company happens to be public anyway.
Also, big companies, private or not, in most countries have to retain an accounting auditor.
Also, if you are a member of the company (as in you have equity) the management has a fiduciary duty toward you. (yes, yes, sure, in practice that means very little, they can siphon off the money in many creative ways), but usually people who are already minority owners have some trust in the majority owners.
In some jurisdictions there are rules about what kind of mechanisms are available for the minority shareholders, and usually the get a board seat, and so they can kind of try to audit the majority.
And in the end they can still sue, or threaten to sue, or whatever. That usually doesn't help with the valuation, and since the majority has more to lose, they can usually work out some minimally satisfactory deal between themselves.
Aaaaand if not, we can finally get the popcorn, because then usually it gets dirty and juicy.
However, investing is always a story about managing risks (so expectations). Public or private, even if it's itself an investment company, it's still just one very fragile basket. And usually there's always someone who has so different risk/expectation profile that they'll take the other end of the transaction. Anyone holding "ETR RKET" has some strange/complex ideas.
'Not on the exchange' means you don't have to follow exchange rules, but if you meet certain criteria, you're still a 'public company' and therefore subject to the same public disclosure filings etc..
Usually that has something to do with the number of shareholders, in which case, if many do actually 'hold out' it may still be de-facto a public company.
Another way of saying: 'you can't just go private because you have 50%'.
But it's also Germany/Lux/EU so it's different 'over there'.
How hard would it be to locate another 3rd party to buy my share? There's no longer an exchange to trade it on, and there might be all sorts of additional rules about how and who I can sell to.
Those are the questions each investor is asking themselves, and I assume that even with the large discount they're being offered, it's probably the better choice unless you hold a significant minority stake.
if you search for the title from the desktop version of Google it's possible to read the cached version
> Investors are under no obligation to sell their shares, of course. But those who stay put will have little power to affect the course of the firm now that the Samwer brothers control the board with their majority stake. Rocket has stated it will be “better positioned” for long-term development if not listed on a stock exchange.
It seems like the main tipping point is one group (the Sameer "clan") getting into a control position. Presumably enough other investors agreed to the earlier buybacks that allowed that to happen.
I still don't quite understand how they could be that "successful". But maybe its just a reflection of society...
Samwer brothers never cared for innovation. They picked whatever worked in the US and made a copy. They could either sell to the the US market leader, as they did with their first company when they sold to eBay, or IPO. All that mattered was to grab the market and get investors to value on the growth.
And to be first, they hired new grads or junior McKinseys they could impress with high pay while giving monkey equity, while pressuring at will.
You say that as if it was a bad thing.
RI: "... and you get a 500k per month budget for SEO. It will the the number one acquisition channel."
Me: "Cool, how man developers will be in my team."
RI: "... that will not be part of SEO."
Me: "Ok, how man Dev resources will I have access to in a sprint?"
RI: "Developers are part of Product and IT."
Me: "Whats the process to get dev resources?"
RI: "You will be Head of SEO."
Me: "....... So i will get 500k per month, but no dev resources."
RI: "The SEO budget is 500k."
SEO just does not work this way. Maybe they changed at one point, but looking at the huge blocks of shitty "SEO" text on the bottom of the pages of a lot of their web-properties I have my doubts.
the phone call was really stupid, as they did not even say what the project was about, because "stealth-mode" but yeah "big budget, join us, come to Munich" ...
These people leave rocket internet and go to other companies and spread the toxic fake work approach.
I was recently approached by a small VC that's hiring talent in France for a company with 2M€ in funding (pre-product). The premise was: no need to prove the business model, another company has proven it in the US and we're getting to market before they do in Europe. We're positive it's going to be a cash cow.
Maybe they thought that they could pass that upper limit of uncertainty with capital and operational speed but that doesn't work for unproven ideas. It's not like a private equity buying a crackers company. Startups in general have very undefined horizons with no operational references or data to build on. How could something like FoodPanda be successful when all the other players in this space struggle and just a few are barely successful?
Stock trading is considered risky. Professional investors might not be happy with this, but will not be overly exposed and will readily invest again if they think they can make a profit.
But as a rule of thumb: A public listed VC does rarely well.
Germany is actually quite different than everywhere else, but ultimately subject to the same trends.
So ... like 'German Ebay' - copy the other types of up-and-coming trends, and then sell them off to the actual global player.
That would actually make sense and be a value add: get the German market 'going' with 'something' and then let it scale with others who know how to do it. It's kind of a win-win-win.
But otherwise, it seems they're taking the very shortsighted view with everything without any material real product/customer/market authenticity ... meaning no long run way to make money.
"Not a single legit innovative technology company coming from Silicon Valley, a place which literally brain drains the world. Theranos, Zenefits. What a miserable failure and waste of human potential."