Rocket Internet’s Delivery Hero might go on IPO

Rocket Internet

There are indications that Delivery Hero, a food delivery tech startup backed by Rocket Internet and other ventures will be going on an initial public offering.

The Chief Executive of the company, Niklas Östberg told Reuters that the company would be looking at an IPO as soon as the time is right. He also said the Delivery Hero is not averse to possible acquisitions.

Niklas Östberg founded Delivery Hero alongside Niklas Östberg, Kolja Hebenstreit, Markus Fuhrmann and Lukasz Gadowski in May 2011.

Frankfurter Allgemeine Sonntagszeitung, a local newspaper reported that Delivery Hero will be going to the market for the IPO by summer with a plan to raise EUR1 billion from the market.

Should Delivery Hero makes its IPO dream a reality, the company will become Rocket Internet’s first venture to go public. In its last portfolio value, LPV, Rocket Internet valued the startup at EUR3 billion. Whether this valuation is sensible from a market point of view is another debate.

Part of the challenge ahead of its IPO dream is the fact that Delivery Hero has not reached profitability. Earlier this year, the startup said it raised EUR387 million from Naspers Limited, Africa’s largest tech startup investor.

Without giving away much information, Niklas Ostberg said his company first-quarter revenue rose 68% on a like-for-like basis to EUR121 million euros. While this commendable, the IPO plan is seen as a move by Rocket Internet to finally exit the company.

The last raising which brought in Naspers saw Rocket Internet cutting its stake in Delivery Hero to 33% from 38% it held a year before. This same strategy is similar to what obtains with Jumia, its general merchandise eCommerce company in Africa where the company has diluted its holding to about 24%.

Rocket Internet is a co-investor with Swedish Kinnevik AB in Global Fashion Group and other ventures in fashion and home rental startups. Kinnevik has strategically reduced its exposure to Rocket Internet by half when it carried out and accelerated bookbuild to half the stake.