German internet conglomerate Rocket Internet’s Asia-Pacific CEO Hanno Stegmann said the company’s global strategy of putting its trust on entrepreneurs failed in India. The company has learnt that such strategies won’t work everywhere and is now applying the learning globally, Stegmann said.

Rocket’s portfolio companies in India, Jabong and Foodpanda, have struggled with accusations of financial misappropriation and saw founders and CEOs leaving the companies. Jabong was recently acquired by Flipkart. Another portfolio company, Fabfurnish, was sold for a song, estimated between Rs 15-20 crore.

Stegmann, however, said that the incidents and experience will not determine how Rocket sees India.

“We will have to see it venture by venture. We are entrepreneurs and sometimes you are successful and sometimes not. We are a bit careful but we are not leaving India,” he said.

Founded in 2007 in Berlin by the Samwer brothers – Marc, Oliver and Alexander, Rocket finds sectors and ideas that have potential to grow and find people who can run the businesses. It infuses the startups with huge capital and increases the chances of success by giving the entrepreneurs a sense of security.

Sometimes it has also backed startups founded by others and entered as strategic partners while ta king majority stake later on.

Rocket reported a $700 million loss during the first half of this year. Listed on Frankfurt stock market, it has a market capitalization of 3.26 billion euro. Stegmann said that the company has generally done a good job of selecting entrepreneurs. Rocket companies employ more than 35,000 people globally, he said. “When you work with so many people, sometimes you will find people who you would not work again with,” Stegmann said.

Rocket also runs Printvenue and Coupon Asia in India. Jabong was acquired by Flipkart for $70 million in July; it was once valued at $300 million. All its co-founders had left the company. A former Foodpanda CEO was accused of favouring his friends in deals done by the company under his watch.Media reports also suggested that the platform faked several restaurants and orders on its platform.

“India is a tricky and competitive market. The areas we focussed on saw increasing competition. While we thought we were early in the market, we were not good at understanding the competitive nature of the market,” Stegmann said.

He added that Rocket is now becoming even more close to the companies it is working with globally , learning from the Indian experience. “We know what to do differently and what not to repeat,” he added.

Source: Times of India