 "Photo: Reuters")
Rocket Internet’s announcement of Foodpanda’s sale yesterday certainly caught most of us by surprise.
We’ve identified five possible reasons for the sale.
1) Was it running out of money?
Rocket’s financials for the first nine months of the year, released last month, make for some interesting reading.
Foodpanda managed to reduce its losses significantly as compared to the previous year. But cash it had in the bank was dwindling fast.
2) Loosening grip in Asia
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Foodpanda had definitely been feeling jittery in Asia. It repeatedly denied that it was looking for a buyer in Indonesia, reportedly for as low as $1 million, only to confirm the huge loss via a statement on its website in October. The sale of its Vietnamese operations was in mysterious circumstances too.
3) It already sold a meaty chunk
Foodpanda’s sale of its Russian operations for $100 million in cash may have been an indication of what lies ahead. It’s likely that the business was sold at a substantial profit.
4) The elusive IPO
Ever since Rocket Internet’s own initial public offering in 2014, the pressure has been on the Samwer brothers to successfully list some of their biggest start-ups.
The initial candidate, according to analysts, was HelloFresh, a grocery box delivery company.
But HelloFresh saw losses spike throughout 2016. Its IPO isn’t on the radar yet.
5) Breathing space
2016 hasn’t been kind to Rocket Internet. Not only did it post a colossal $700 million loss, it also saw the collective value of its fashion stores shrink by $2.4 billion.
The sale of Foodpanda would help the Samwer brothers take a step back and concentrate on problems that need the most attention.
This is an excerpt from Tech in Asia. You can read the full article here