German e-commerce incubator-cum-investor Rocket Internet has raised $445.1 million by selling 10 per cent stake to Philippine Long Distance Telephone Company (PLDT), a leading telecom operator in the Philippines, which sets a valuation of around $4.45 billion ahead of a rumoured public float of the company.
The deal is part of a global strategic partnership to drive the development of online and mobile payment solutions in emerging markets, the firms said.
PLDT and Rocket will jointly develop mobile and online payment technologies and services in emerging markets. The partnership will leverage PLDT's experience and intellectual property (IP) in mobile payments and remittance platforms, together with Rocket's global technology platform, to provide products and services for the ‘unbanked, uncarded and unconnected’ population in emerging markets.
PLDT's investment in Rocket will be in new shares issued by the company—of the same class and bearing the same rights as shares held by current investors. PLDT will fund the investment from available cash and new debt, and as part of the investment, the company will hold the right to appoint one member of Rocket's nine person supervisory board.
Commenting on the investment, Oliver Samwer, founder and CEO of Rocket Internet, said, “Strategic partnerships are a core part of Rocket's strategy to provide great services to consumers and rapidly roll out new internet based business models across diverse geographies. Financial technology is a key focus sector for Rocket and this partnership will allow us to build on PLDT’s innovations in mobile money and micro-payments and accelerate the delivery of those solutions around the world."
“The strategic partnership will allow us to leverage our combined strengths in developing online and mobile payment solutions in emerging markets. Rocket has developed a unique platform for establishing new internet companies and has a proven track record in successfully rolling out these businesses in fast growing markets,†added Napoleon L Nazareno, president and CEO of PLDT.
Last month, Rocket Internet reportedly held a road show in Berlin for its possible initial public offering (IPO) later this year on the Frankfurt Stock Exchange. The firm was said to be looking to raise more than $4 billion from the share sale. This followed a previous report which had said the firm is looking at a valuation of $4 billion in the proposed IPO.
Founded in 2007 by the Samwer brothers (Marc, Oliver and Alexander), Rocket Internet is of the largest internet incubators in the world. It has created over 100 companies in over 50 countries, from dozens of which it has exited successfully. The firm is headquartered in Berlin, and operates a network of 25 international Rocket offices, covering all relevant developed and emerging markets.
Its primary focus is on building proven, transaction-based business models in the online and mobile space. Rocket claims to have more than 20,000 employees in its network of companies across over 100 countries, with aggregated revenues in excess of $935.9 million in 2013.
It already has a sizable presence in Asia, including India. The firm’s Indian ventures include Jabong.com, CupoNation, FabFurnish, Foodpanda, PrintVenue, OfficeYes and 21Diamonds.
Last July, Rocket Internet had raised $500 million in a fresh round of funding led by Investment AB Kinnevik and Access Industries. PLDT joins Investment AB Kinnevik and Access Industries as the third external investor in Rocket, in addition to Global Founders GmbH (earlier European Founders Fund GmbH).
Through its principal business groups – fixed line and wireless – PLDT offers a wide range of telecommunications and multimedia services across the Philippines. The company’s wireless subsidiary, Smart Communications Inc., provides mobile banking & mobile wallet services including online money transfers, payments, disbursement, banking and security. According to the company, Smart's mobile money system handled transactions valued at approximately $4.54 billion in 2013.
(Edited by Joby Puthuparampil Johnson)
