$1bn debut Rocket fund to allow ‘faster funding’

The European Investment Fund is among LPs in the German firm’s record breaking fund, which will have a ‘virtuous impact’ on European VC.

Listed German tech incubator Rocket Internet has closed its first institutional fund, Rocket Internet Capital Partners, on $1 billion.

The firm says the fund will help Rocket “reduce significantly its reliance on co-investors in individual portfolio company funding rounds.”

“Our companies will have access to more capital and be less reliant on individual co-investors, thereby allowing them to fund in a faster and more efficient manner. This will greatly enhance the entrepreneurial flexibility of our portfolio companies,” said Oliver Samwer, chief executive officer of Rocket Internet.

Investors in the fund included financial institutions, pension funds, asset managers, foundations and high net worth individuals.

The European Investment Fund, the European SME backer owned by the European Investment Bank, also invested in the fund. “Rocket Internet is a well-known firm in the internet sector and the team has high ambitions to build and invest in potential global leaders in the internet sector. We are happy that this fund has become the first European venture capital fund to reach the $1 billion fund size. Such success stories will have a virtuous impact on the overall European ecosystem,” an EIF spokesman told PEI.

Rocket contributed around $140 million of its own capital to the vehicle.

A spokeswoman for the firm said the fund, which co-invests along its listed parent, has been actively investing since a first close in January 2016. In early January the firm backed a $100 million funding round in London-based peer-to-peer lender Funding Circle.

The close of the fund follows Rocket’s announcement in September last year that its portfolio of online businesses lost €617 million in the first half of 2016.

The firm, which went public in a 2014 listing which valued it at around €6.5 billion, has a current market capitalisation of €3.24 billion.