Milner backs out: Samwer strategy threatened by damaged reputation?2012-02-07 3
Based on recent developments in the public perception of the Samwer brothers (after hit singles and countless tales of aggressive management), Yuri Milner reports he is backing away from the Rocket orbit. Now Rocket Internet’s three founding brothers are raising state funds from the Abu Dhabi Investment Authority and Temasek Holding of Singapore, FOCUS reports.
Is this only a delay? Or is Milner’s withdrawal a sign of international repudiation that will prove difficult to overcome?
The current financing round is aimed at crossing the billion-dollar threshold, the upward figure necessary to create a fund worthy to compete with any big site in the USA or the financial muscle of the Russians in Europe. Whether a delay or a bullet, Milner’s egress is significant: It seems that if the Samwers do not actively take steps to repair their public image (not only in Berlin but abroad), funding from the traditional community will be difficult to obtain.
Let’s face it. Wimdu is not gaining its desired momentum, paralyzed predominantly due to shrewd competition from on-ground rival AirBnB. Zalando is Rocket’s only visible money-maker. Without funding, it will implode. Without Milner’s funding, it is less attractive to other investors.
Who will step in now?
US investors will be reluctant to do business with the brothers given the country’s inherent dislike of cloning. Russian investors extending both beyond and below Milner will also be skeptical about investing in a German outfit that lacks a respected track record in the east. Unless the Samwer managment model changes (and apologies are issued), it looks like their wings may be clipped once and for all.
But who would want to see Berlin’s favorite playground antagonists go home? And isn’t their aggression why we have to play with them for now?