Rocket Internet Is Said to Seek $4 Billion Value in IPO

May 31, 2014 4:44 pm ET

(Updates sixth paragraph to show Berenberg declined to comment.)

May 31 (Bloomberg) -- Rocket Internet GmbH, the online startup investor founded by Germany’s Samwer brothers, is planning an initial public offering that may value the company at more than 3 billion euros ($4 billion), according to two people familiar with the situation.

Rocket is working with Berenberg, JPMorgan Chase & Co. and Morgan Stanley on a share sale that’s planned for Frankfurt later this year, the people said, asking not to be identified discussing a private matter. Berlin-based Rocket, which calls itself the world’s largest Internet incubator, has investments in more than 75 companies including online retailer Zalando SE.

Food-delivery startup Just Eat Plc and King Digital Entertainment Plc, the creator of Candy Crush games, are among companies that have gone public this year, even as investors are cautious about how new businesses will generate profits. The STOXX 600 Technology Index has fallen this year in an otherwise rising market.

Rocket and its ventures have received over 2 billion euros in external funding, according to Swedish holding company Investment AB Kinnevik. The Samwer brothers, Alexander, Marc and Oliver, founded Rocket in 2007.

“We focus on what’s best for the company and that is concentrating on our operations, in order to build a business for the long-term,” Andreas Winiarski, a spokesman for Rocket said yesterday. He declined to comment on a possible IPO.

Representatives at JPMorgan, Morgan Stanley and Berenberg declined to comment.

Cloning Capital

The Samwer brothers have a model of finding a promising Internet business in the U.S. and cloning it internationally. Since starting their first so-called dot-clone in 1999, a German version of EBay Inc., they’ve duplicated sites such as those of Airbnb Inc., EHarmony Inc. and Pinterest Inc. Zalando, a Zappos.com Inc. clone, is also planning an IPO this year, people familiar with the matter say.

Rocket starts companies, hires staff and provides marketing, design and management know-how until the fledgling company can fend for itself.

Known for putting Berlin’s startup scene on the map, the Samwers are also credited for sticking Germany with a reputation as the copycat capital of Europe. If both Zalando and Rocket go public this year, they will also revive IPO activity from Berlin, which hasn’t seen a sizable technology sale since Hypoport AG in 2007, data compiled by Bloomberg show.

--With assistance from Christopher Spillane in Johannesburg and Niklas Magnusson in Stockholm.