Abstract

The case describes the rise and challenges of Rocket Internet (Rocket), a German internet company which was a cross between a consultancy and venture capitalist (VC) and was one of the world’s largest start-up incubators. Rocket invested in internet companies that took mature and proven business models from developed markets to fast-growing markets. Rocket’s forte was rapid deployment of capital and fast execution to scale the start-ups to overtake the incumbents. Rocket created shareholder value by exiting start-ups either through an IPO or selling them to the competition. The case further describes the challenges faced by Rocket in 2016 to bring further growth in the wake of criticism faced by it for its business model and the slump in valuation of its top start-ups.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand Rocket’s unique business model
• Debate on the innovation quotient of Rocket’s approach
• Devise a comeback strategy for Rocket.

Keywords

Innovation, Start-up, New Business Model, Incubator, Valuation, Rocket Internet