– Why did Rocket Internet take on the Foodpanda project? How do you usually select objects for investments?
– In all branches and sectors of the consumer market, a transition is taking place from offline communication channels to online ones, to which the new mobile apps channel must now be added. What used to be done by exchange of documents is now more and more often done online. To order a taxi, you don’t have to make a phone call, it’s all done by a special smartphone app. The same applies to the food delivery market – phone orders are being squeezed out by online and mobile app orders. The online world, and even more the mobile apps, are making life better. In this world, everything is faster, more convenient and more transparent. It has more selection and simpler communication. And everything that makes life better creates consumer value and the opportunity for a successful business. The Foodpanda business is based on this. A project which makes food delivery simpler, more convenient and more transparent improves people’s lives.
Switching from offline to online is quicker in Russia than in other markets.
– What do you think are the specific features of Russian investment projects?
– Russia’s overall potential is obvious – 140,000,000 consumers in one country! Last year Russia overtook Germany, France and Great Britain to take first place in Europe for its number of internet users. Switching from offline to online is quicker in Russia than in other markets. The Russian infrastructure provides a solid basis for such projects as Foodpanda, and the Russians themselves are mature well-educated people. We consider such market conditions virtually ideal.
About Rocket Internet:
Rocket Internet is a German venture fund, a business incubator founded in 2007 by the well-known Internet entrepreneurs the Samwer brothers, creators of Alando, sold on eBay in 1999 for $90,000,000, Jamba!, sold to VeriSign in 2004 for $270,000,000 and other successful projects. The company specialises in internet startups, selling ideas mostly of American origin on the European market. Ralf Wenzel, a graduate of Berlin University and a computer science specialist, was working on the Jamba / Jamster project but is now fully occupied with Rocket Internet’s latest startup, Foodpanda.
– How was the project started? What difficulties were encountered? What is your role in the startup?
– The project began with the formation of a highly qualified team of people who know all the specific features of the local market. This is an essential condition for the success of any project in any country. Knowing the local market properly enables many mistakes to be avoided. Then we adapted our global product to the requirements of Russian consumers, and concentrated all our efforts on creating partnership relations with the best restaurants all over Russia, to give consumers the best choice. Every day we discuss the results, successes and problems of our business. I, as the global CEO, coordinate operations across different countries and make sure that useful information is available to everyone and that the product and the business processes are constantly being improved on the basis of feedback from the consumer, so that we continue to do something really important, from Senegal to Vietnam, from Argentina to Russia, from Poland to Brazil. I have been in internet business for more than 10 years, and this experience helps me a great deal. But problems arise every day. If you are operating in 27 countries, there is always something to do
– How often do you communicate with the Moscow team, and in what way?
– At the present stage, constant communication is extremely important. The more often we communicate and the more deeply we go into things, the quicker we react to a change in the situation, so that our business develops more successfully. We discuss matters by phone, we hold video conferences. We try to use e-mail as little as possible. We adhere to the team culture, but at the same time, we give local teams broad rights and autonomy. Our central team collects business information from all the countries, and uses it to set global standards. Communication is both vertical and horizontal. Only in this way can we ensure the quickest distribution of useful information.
We adhere to the team culture, but at the same time. we give local teams broad rights and autonomy.
– How do you assess the general prospects of the projec?
– In all countries, we are seeing rapid growth literally every few months. The consumers like our product, and our client base is constantly expanding. Food is ordered everywhere. And we make use of this. The more effectively we do so, the better quality service we can offer. We begin on a small scale, and then scale up the business on the basis of actual figures and assessments. Cooperation with such partners as KFC and McDonalds helps us speed up our further development.
– What are the prospects for online startups in Russia in general?
– According to Morgan Stanley’s assessment, the Russian e-commerce market will increase by 35% by 2015. This is the highest rate of increase in the world. We want to become part of this process and play an important part in it. In Russia, the main problems are the huge distances and the logistics. But this also offers great opportunities for business. Many creative ideas are being expressed on how to overcome these difficulties. We are cooperating with a large number of restaurants, who have already developed highly sophisticated methods of quick delivery of orders to consumers attracted by our site. The basic principle of any startup is this: find some problem and offer a solution. In Russia, as everywhere, there are enough problems, which means there will be solutions tooя.
– What would be your advice to Western investors? Which sectors of the Russian market are the most attractive?
– Every investment opportunity is unique and requires special study. Each sector has its leaders and all sectors are expanding. The Russian internet market is still very young, and the competition in it is not so great as it is in other sectors. This means that there are more opportunities for a successful business – in many fields. The companies which understand local problems better than the others and are able to turn these problems into consumer values will win the race. And if you achieve success in the Russian market, it means you will find success everywhere you go.
If you achieve success in the Russian market, it means you will find success everywhere you go.
– What other investment projects do you have in Moscow?
– At the present time, Rocket Internet is working with five other Russian venture projects: eDarling, Lamoda, mebelrama, Westwing and wimdu. A Russian version of Cuponation also opened recently.
– What scale of investment are we talking about?
–We have collected over $20,000,000 from a group of investors. These include, in particular, such funds as Investment AB Kinnevik and Phenomen Ventures.
– Have there been instances of friction or misunderstanding with the Moscow team? How do you act in such a situation?
– We support a culture of discussions and exchange of knowledge, and we have a splendid team of specialists augmenting each other. Of course, differences in points of view about the business can always occur. We consider them and analyse them. We try various versions and see what happens. But when the conclusions have been drawn and a decision is taken, there is only one thing to do: act.