Rocket Internet, a major investor in Jumia, will cease trading publicly in the Frankfurt and Luxembourg stock exchanges after its stock price fell by 13% in 2020. The startup incubator will raise funds from private investors, pursuing long term development outside the stock market. TechCrunch reports that the decision has also been driven by flooded capital in the tech startup space, eating up its use as a provider for growth capital.
Rocket Internet CEO Oliver Samwer says the move will protect the company from temporary circumstances.
“Outside a capital markets environment, the Company will be able to focus on a long-term development irrespective of temporary circumstances capital markets tend to emphasize on,” reads a company statement.
Shareholders will meet on September 24 to approve the delisting. However, the move has implicit approval from the company since the CEO owns 4.53% while its Investment arm, owns 45.11%. The company is also offering a buyback scheme to buy 8.84% of the shares worth 223 million-euro, which will give the CEO majority stock.
The company will later buyout the rest of the shareholders with roughly a billion euros.
Rocket internet strategy to clone successful Silicon Valley startups in emerging markets has bittersweet results. On the one hand, the company has successful startups like delivery app Delivery Hero and Zalando, valued at $24 billion in its portfolio. On the other hand, Rocket Internet backs companies like Jumia, whose shares fell after its IPO.
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