Here’s what you should know this morning.

1. After Rocket’s biggest outside shareholder Kinnevik sells 10.9 million shares, what does it mean for the German company?

Kinnevik sold 10.9 million shares overnight for 19.25 euros each, a 10% discount to the closing price, raising 207 million euros ($218 million). That’s just under half the Rocket share price of 42.50 euros at its 2014 IPO.

Has it been profitable for Kinnevik? Despite its poor performance since IPO, Rocket has been lucrative for Kinnevik. It has generated an annualized internal rate of return of 91 percent since the initial investment of 155 million euros in 2010

Growing bad blood: Kinnevik’s presence at Rocket has been a godsend fblessing or other investors since it gave more regular and realistic valuations of Rocket’s assets, than what was coming from the Rocket founders themselves. The Samwers and Kinnevik eventually clashed over strategy and the Swedish investor didn’t take part in a 1 billion euro fund Rocket raised last year.

The tensions built until the Kinnevik CEO and another executive stepped down from Rocket’s board in June.

Questioning the business model, is Rocket actually fit to be a public company?: For all its talk of being a builder of companies, it is best understood as a listed venture capital fund. It invests in or founds startups and nurtures them until trying to exit via a sale or an IPO.

That’s not the only reason it is ill-suited to public markets. Investors value public companies based on expected future earnings. Rocket’s companies are unprofitable, though losses are getting less. It only gets cash in the rare event that it sells or lists a company.

Read the rest of the story here

 

2. Finquest acquires investor-startup marketplace Detecq to boost tech M&A in Asia

Finquest, a Singapore-based platform that fosters global deal flows, has acquired investor-startup marketplace Detecq. No financial details were disclosed.

Both use a unique system of algorithms to curate and matchmake the best deals. Finquest currently has a database of more than 1 million users. The acquisition of Detecq will bring its entire network of corporate investors, M&A professionals and tech companies into Finquest’s umbrella. This will provide clients with a wider selection of deals to pick from.

The acquisition expand Finquest’s presence in Asia’s tech ecosystem.

Read the rest of the story here.

 

3. Recommended Reading: The Evolving Role of WeChat in a Shanghai Multi-Brand Boutique

Xinlelu.com has been a standout on multiple fronts. Much of this brand cultivation at Xinle Lu is done online rather than offline, and molded through a strong WeChat community and content.

Xinle Lu’s niche consumer is a small but growing base of a sophisticated, professional Shanghainese women who are fashion- and travel-curious.

“Strategy-wise, we are now aiming to drive traffic to WeChat as a destination. In the last five years, we saw traffic go from newsletter to website to WeChat to Weibo, but now we want to drive this back to WeChat.” Said Xinle Lu co-founder, Yilei Wu. “In 2017, we will likely focus more on website maintenance and building WeChat and Instagram. We will not be working on Weibo because the platform is not an efficient way to reach and engage with our customers.”

Read the rest of the story here.

 

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