March 16, 2017 / 11:35 AM / 3 years ago

Qatar takes stake in Rocket Internet's HelloFresh

BERLIN (Reuters) - Qatar’s sovereign wealth fund took a stake in Rocket Internet’s (RKET.DE) loss-making recipe and ingredients business HelloFresh in a December fundraising, the German company said on Thursday.

Founded in Berlin in 2007, Rocket has built up dozens of businesses from fashion e-commerce to food delivery, but many investors have become concerned about heavy losses and falling valuations for its key start-ups.

Rocket’s shares, which dropped last month after major investor Kinnevik (KINVb.ST) sold half its stake in the company, were up 2.3 percent at 1351 GMT.

Rocket said in December that HelloFresh had raised 85 million euros ($91 million) from an unidentified leading global investor and existing shareholder Baillie Gifford, at a 2 billion euro valuation, down from a previous 2.6 billion euros.

On Thursday, German magazine WirtschaftsWoche cited HelloFresh Chief Executive Dominik Richter as saying that Qatar had been part of the fundraising.

A spokeswoman for HelloFresh confirmed the report, saying it was very happy to welcome Qatar as a long-term investor, noting the fund usually only invests in big corporations and listed companies.

Founded in 2011, HelloFresh has been investing heavily in marketing and logistics, expanding from its base in Europe to the United States, Canada and Australia.

HelloFresh made a loss before interest, tax, depreciation and amortization of 66.3 million euros for the first nine months of 2016 on revenues of 438 million euros. Rocket Internet reports full-year results on April 27.

Rocket’s stake in HelloFresh now stands at 53 percent. HelloFresh is one of its biggest holdings and is viewed as a potential candidate for an initial public offering, though a previous attempt to list the business stalled in 2015.

HelloFresh confirmed a report in WirtschaftsWoche that it agreed a 50 million euro credit line from Rocket in April, which a spokeswoman said would “be used towards expanding our business.”

Meanwhile, online takeaway firm Delivery Hero, which is Rocket’s other major investment, is set to report a loss of 117 million euros for 2016, WirtschaftsWoche reported.

A Delivery Hero spokesman declined to comment on the figure, but said the group’s marketplace business had turned profitable by last summer, while the Foodpanda business it bought from Rocket in December was still loss-making, although growing fast.

Editing by David Goodman and Mark Potter

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