This German internet company copied itself to success. Now, its biz model is in question.

Rocket Internet built a multibillion dollar business by cloning US firms. Its business model is now in question and plans to delist from European stock exchanges.


September 10, 2020

I have 2 salient memories of living in Ho Chi Minh City in 2012.

First, my expat friends inexplicably called me the “Saigon Don.” Second, I remember the arrival of Zalora, a startup that aggressively entered Vietnam’s market with an offering of fashionable footwear.

Billed as the “Zappos of Southeast Asia,” Zalora was the brainchild of Rocket Internet… which itself was the brainchild of 3 German brothers (Oliver, Marc, and Alexander Samwer).

Silicon Valley has long blasted Rocket’s model

No wonder: It cloned Western internet companies for non-US markets. Many have also questioned the firm’s business ethics and its suspect valuation techniques, which inflated startup prices.

Despite its bad rap, a recent Fortune article notes that Rocket has ripped out some wins:

  • Zalando, another Zappos clone, is a leading European e-tailer valued at $19B
  • Delivery Hero, a food delivery clone, is valued at $18B
  • CityDeal, a Groupon clone, was acquired by… Groupon
  • Lazada, “Southeast Asia’s Amazon,” has received $1B+ in funding from Alibaba

But the incubator and cloning model is losing steam 

Once the toast of the European tech scene — which underwhelms relative to its economic heft — Rocket was valued at $8B+, but now trades below $3B as many of its cloned ventures have failed.

Per Fortune, the firm plans to delist from the Frankfurt and Luxembourg stock exchanges.

Zalora was shuttered in 2016 but, thankfully, the “Saigon Don” moniker is alive and well (def @ me).

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.