Rocket Internet is expanding an online jobs platform it started in Myanmar into Sri Lanka and probably on to other countries, including Cameroon.
The expansion tells you a lot about Rocket, which is a Berlin-based Internet investor and conglomerate with an increasing presence in the world of technology and emerging markets. The company went into to Myanmar fast, on the first signs of an economic boom, and dealt with complications such as having to drive to collect payments from clients (almost every transaction in the country is conducted in cash). And once it had a model that seemed to work — the company pushed it out toward other markets, Sri Lanka in this case.
“The way the platform [Everjobs] accelerated in Myanmar without too much management and marketing efforts made us think our very user friendly and fresh job portal can also become a great success in other markets,” said Ronald Schuurs, the Rocket executive who is now taking the classifieds site into Sri Lanka along with executive Theo Poursanidis.
Eight-year-old Rocket, whose IPO valued it at more than $8 billion last year, now employs 25,000 people in 100 countries. It has dozens of companies (one estimate is about 75) under its umbrella and, according to its web site, had EUR757m in revenue in 2013.
Silicon Valley doesn’t always like what it sees about this kind of tech company: In the tech world, Rocket is the subject of many digs for its style of business, which involves cloning Internet ideas and scaling them and sometimes, retreating quickly when an idea doesn’t work out.
For instance, take a look at the language in this recent TechCrunch article about Rocket. Here’s how it described the company’s success a month ago: “Rocket Internet gained notoriety for a perceived policy of ‘cloning’ successful startups in a bid to make a quick buck by selling them later.”
Stories about Rocket have also shown up under headlines such as: Attack of the Clones. And entrepreneurs I’ve talked to take pains to distinguish themselves from a Rocket-style approach.
Why the unease? Rocket doesn’t have Silicon Valley’s attitude of equity-for-all; Schuurs said senior executives such as country managers can get equity, and he has equity in the company launching in Sri Lanka. But it is not universal through the company. It has also has, judging from its web site, an entirely male management team, which could rankle some.
But it probably has most to do with the idea that Silicon Valley is wedded to the image of technology as innovation and disruption. The idea that it is a business like any other, one that can be scaled, is anathema.
In fact, CEO Oliver Samwer has called himself Bob the Builder. Bob the Builder is not exactly Silicon Valley’s idea of a hero.
I asked Schuurs what he thought was behind the hostility that sometimes emerges around Rocket.
“Rolling out and scaling is just not so easy. You try to copy something in a different market, it’s going to be different,” he said. “That’s one thing that Rocket does really, really well.”
Rocket also invests eagerly in emerging markets. Many American businesses, on the other hand, dip a toe in reluctantly, often not exactly because they want to be there but because they’re worried they’re going to miss out on the world’s next big growth surge.
Contrast that with Rocket in Myanmar. The company jumped in when the economy started to boom three years ago after sanctions were lifted. The conglomerate opened classifieds, car and real estate Internet businesses, said Shuurs.
The company says it relishes the challenges. In Myanmar, for instance, most transactions are in cash. So that meant the team in Rangoon had to get in taxis and drive to clients’ businesses to collect payments, and then drive them to the bank.
The exchange rate is about $1 for every $1,000 kyat. So when employees were paid by Myanmar country manager Jort Statema, it was with suitcases full of cash, said Schuurs.
The Myanmar site has about 1 million page views per month, with about 140,000 unique visitors, according to Rocket. Sri Lanka was its first expansion market because it has a 4G network, according to the company, and the share of the population using the Internet almost doubled from 12% in 2010 to almost 23% in 2013.
To Rocket, the hard work is worth it to root early in what are expected to be the world’s next boom cities. Koen Thijssen, co-CEO of Rocket’s Asia Internet Holding, recently pointed out to the London School of Economics that smartphone penetration in Asia’s emerging markets is going to double in the next five years.
“That means, from the point that we are today, we’ll get a new addressable market of 100 million people. How often does it happen that you’re present in a market and your addressable market increases in a five-year time span with 100 million potential clients? It’s a super-big macroeconomic tailwind you’re getting in these markets.”
Of course, whether Rocket’s bold emerging markets business model succeeds remains to be seen. Despite its big IPO, it’s not yet a proven winner, either on the investment side, with sales of its companies, or as a publicly held conglomerate, with steadily growing revenue and solid profits.
The company’s founders and a handful of other investors, including Swedish investment company Kinnevik , United Internet and the Phillipinne Long Distance Telephone Co., are large shareholders.
Here’s how Rocket described the corporate structure over Everjobs — interesting because it lists some of the other startups in Rocket’s Asia and Africa groups.
Everjobs is backed by Rocket Internet, the Asia Pacific Internet Group (APACIG) and the Africa Internet Group (AIG). The Asia Pacific Internet Group is a joint venture of Rocket Internet and Ooredoo. The group’s network consists of 13 e-commerce and online marketplace companies, operating across 15 countries. Africa Internet Group is the parent group of nine successful and fast-growing companies in more than 26 African countries, accounting for over 3,500 staff. Its network of companies includes JUMIA, Kaymu, Hellofood, Lamudi, Carmudi, Zando, Jovago, Lendico and Easy Taxi.
