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Rocket Internet eyes jackpot in online takeaway delivery

By Eric Auchard

FRANKFURT (Reuters) - German e-commerce group Rocket Internet has splashed out hundreds of millions of euros to increase its stakes in two grocery and food delivery companies, in what it said was a move towards creating the biggest delivery network outside China.

Its shares leapt more than 8 percent to hit their highest since early January.

Rocket said on Friday it was raising its stake in HelloFresh to 52 percent for 130 million euros (96 million pounds) and was buying a new 30 percent stake in Delivery Hero for which it agreed to pay 496 million euros.

It was also making acquisitions of delivery firms Pizzabo in Italy and La Nevera Roja in Spain, all of which will sit alongside its 50 percent-owned Foodpanda.

Rocket's top executive Oliver Samwer said Europe's biggest e-commerce company was poised to hit the jackpot by creating the biggest delivery network outside China.

"This is the next frontier," Samwer said on a conference call. "This is the emerging frontier of e-commerce: Food and groceries." Existing companies in these areas include a range of players from Amazon.com to Domino's Pizza.

While Berlin-based Rocket sees itself as building an e-commerce operating empire, some investors see it as a launchpad for future stock market listings of everything from online fashion to home furnishings to personal finance firms.

Rocket cited market research suggesting the potential online global food and groceries market was worth as much as 324 billion euros ($368 billion), making it far bigger than established e-commerce marketplaces, including travel, consumer goods, fashion and home furnishings.

"I feel like the year 1998 again. We hit the jackpot," Samwer said, referring to the heyday of the dot-com era, the year before he and his two brothers founded, then quickly sold, German online auction firm Alando.de to eBay for $43 million.

PORTFOLIO VALUE

In a quarterly update, the company said the last portfolio value (LPV) of its investments stood at 3.4 billion euros, up from 2.6 billion at the time of Rocket's flotation in early November.

The company is only required to publish results on a half-yearly basis, which it plans to do next in early May.

Separately, Kinnevik, the Swedish investment firm which is a frequent investment partner with Rocket, said the net asset value of all of its investments at the end of last year was up 10 percent on the previous quarter at 84.4 billion Swedish crowns (8.9 billion euros).

Shares in Kinnevik were up 7.5 percent to 274 crowns.

Rocket, which had said it would use some of the proceeds of its stock market listing to take bigger stakes in some of its existing portfolio of dozens of companies, said it was forming a new global online restaurant takeaway service bringing together existing and new investments.

As part of this it had taken majority control of two out of eight of its top performing holdings, HelloFresh and Delivery Hero. Separately, Foodpanda said it had agreed to acquire seven rivals across Asia, including the Indian business of Just-Eat Plc. Just-Eat remains active across Europe, Brazil and Canada.

Since June, Rocket-backed companies have rolled up more than 13 individual firms in the takeaway market.

The newly combined Global Online Takeaway Group of Rocket investments is now active in 64 countries, where it counts 140,000 restaurant delivery partners, which collectively have an annual run-rate of 78 million orders based on December results.

(Additional reporting by Harro ten Wolde; Editing by Greg Mahlich and David Holmes)