Europe’s biggest and richest internet incubator Rocket Internet has announced a massive investment of €333 million from Philippine Long Distance Telephone Company (PLDT) in exchange of 10% stake in the company, putting the market value of the German giant roughly at €3.3 billion. The couple simultaneously announced a joint project that will focus on developing online and mobile payments systems and tech for emerging markets.
Under the agreement, Rocket will benefit PLDT’s money expertise and resources to grow its Asian revenue stream. The two will start by jointly developing mobile and online payment technologies and services to capture the “unbanked, uncarded and unconnected” population in emerging Asian markets.
The deal came a quarter after the German incubator and investor has partnered with another major Asian player, Qatar’s Ooredoo, to develop and fund online businesses and create new revenues streams in 15 Asian markets that include Pakistan, Malaysia, Singapore, Indonesia, the Philippines and Australia.
Rocket has more than 20,000 employees in in over 100 countries with combined revenues exceeding €700 million in 2013. Its most popular brands include leading Southeast Asian e-commerce businesses Zalora and Lazada. Though the operations of most Rocket-backed startups revolve around e-commerce and marketplaces, Rocket says it sees numerous and significant growth opportunities in financial tech.
PLDT, on the other hand, is a regional leader in mobile banking and mobile wallet services. It has considerable experience in launching fin tech services especially in ‘underserved’ markets where up to 4 out of 5 people are “unbanked”.
Oliver Samwer, the founder and CEO of Rocket Internet, commented “Financial technology is a key focus sector for Rocket and this partnership will allow us to build on PLDT’s world-class innovations in mobile money and micro-payments and accelerate the delivery of those solutions around the world. We are very pleased to welcome PLDT into our core shareholder base.”
According to the press release, PLDT’s investment in Rocket Internet will be in new shares issued by the company, “of the same class and bearing the same rights as shares held by current investors.” As part of the deal, PLDT will appoint one member to Rocket’s nine person Supervisory Board.
PLDT says it will finance the investment with some cash from its vaults as well as additional debt.