Kinnevik representatives to leave Rocket Internet board

BERLIN (Reuters) - Rocket Internet said on Monday two supervisory board members from long-standing investor Kinnevik would step down at its annual shareholder meeting on June 9.

The logo of of Rocket Internet, a German venture capital group is pictured in this September 24, 2014 illustration photo in Sarajevo. REUTERS/Dado Ruvic

The move follows differences between the two companies over the valuation of joint investments, with Kinnevik putting a lower price on most of them and Rocket shares falling sharply last week as analysts questioned some of its valuations.

Rocket said in a statement Kinnevik CEO Lorenzo Grabau and Erik Mitteregger would resign from the supervisory board and be replaced by two members independent of its shareholders.

A Rocket spokesman said the departure was agreed by mutual consent. But company sources have told Reuters Grabau and Rocket CEO Oliver Samwer have disagreed for a while over strategy.

A Kinnevik spokesman said its two board members were stepping down to avoid any potential conflicts of interest over future investments. “This has nothing to do with any disagreement. We continue to work together. We just believe it is more prudent not to sit on the board,” he said.

Grabau was replaced as chairman of Rocket’s supervisory board in December by former ProSieben digital media manager Marcus Englert.

In February, Grabau told Reuters this was because Rocket had moved from being a pure internet incubator to being more like an investment firm in online companies with a model very similar to Kinnevik’s, making it important to have an independent chairman.

Analysts predict Kinnevik will eventually seek to part ways with Rocket as Kinnevik shifts its investments into education, financial technology and healthcare.

Founded in Berlin by brothers Oliver, Alexander and Marc Samwer in 2007, Rocket has set up dozens of ecommerce sites, aiming to replicate the success of Amazon and Alibaba in Africa, Southeast Asia, Latin America and Russia.

But some investors are concerned over the scale of losses at its start-ups ranging from online fashion to food delivery, as well as delays to planned listings due to volatile markets.

Rocket’s shares tumbled last week after a new fundraising with Kinnevik for its Global Fashion Group (GFG) slashed the start-up’s valuation by two thirds. The stock was down another 3.1 percent at 1220 GMT.

Kinnevik was one of the first investors in Rocket and still has a 13 percent holding - as well as stakes in several of its major start-ups - making it the firm’s second-biggest shareholder after the Samwer brothers’ 38 percent stake.

Rocket said the two Kinnevik board members would be replaced by former Deutsche Bank finance chief Stefan Krause and French telecoms group Orange’s deputy chief executive Pierre Louette.

Kinnevik is still represented on the supervisory board of online fashion firm Zalando - its most successful joint investment so far with Rocket. Kinnevik Chairman Cristina Stenbeck has been chairwoman of Zalando’s supervisory board since 2014 and Grabau has been vice chairman since 2013.

Additional reporting by Nadine Schimroszik in Berlin and Mia Shanley in Stockholm; Editing by Maria Sheahan and Mark Potter