Investors give Rocket Internet, the global e-commerce investor, a chilly welcome to the Frankfurt stock exchange, letting its shares drop by 14 percent. As Sonia Legg reports, many consider the German firm's emerging market focus too risky.
The launch of Germany's Rocket Internet was brought forward a week because investor interest was so high. And Frankfurt's stock exchange laid on a red-carpet style welcome for the venture capitalist cum start-up incubator. Oliver Samwer is CEO. He set up the firm with his brothers Alexander and Marc. It's invested in more than 75 different companies. But its market debut wasn't all fireworks - shares dropped 14% initially to 36 euros before recovering slightly. (SOUNDBITE) (English) ROCKET INTERNET CEO, OLIVER SAMWER, SAYING: "I think this is a very exciting day for our company. I think this is also a milestone for the German tech sector. I think our company thinks very long-term, our management thinks long-term and our shareholders also think long-term." Rocket was founded in Berlin in 2007. It's made a living taking the ideas of successful western tech companies and cloning them abroad. But it's also invested heavily in emerging markets - and some say too much. Eleven of the most-matured companies it's put money into reported losses of 442 million euros in the last fiscal year. Four to five hundred million euros of the flotation proceeds may well head their way. (SOUNDBITE) (English) ROCKET INTERNET CEO, OLIVER SAMWER, SAYING: "If you look at it, in most of the mature markets in the U.S. and China, e-commerce has already gone a long way. In our markets, many of them are at an inflection point and so if you're looking for growth, if you're looking for long-term profitability I think we offer an exciting opportunity." The Samwer brother's reputation will no doubt help propel Rocket. But Commerzbank's Peter Dixon says the risks are high. (SOUNDBITE) (English) PETER DIXON, GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, SAYING: "The trouble is they face a huge amount of domestic competition and the currency movements are likely to operate against them as well so in the short term I think it is very difficult for companies to go into these markets right now and say 'hey we have got a great business model but it does rely on emerging markers delivering the growth' and at the moment that's not the message that investors want to hear." But the Samwer brothers aren't worried. And the flotation will also boost their personal wealth. After years mimicking billionaire entrepreneurs they may now be joining their club.