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By Eric Auchard
FRANKFURT (Reuters) - (This October 2 story is corrected to remove incorrect reference to Oliver Samwer's Twitter account in paragraph 10)
To its detractors, Rocket Internet, which on Thursday completed Europe's largest e-commerce flotation in a decade, is either a shameless copycat of others' business ideas or, more harshly, an apocalyptic harbinger of the next tech bubble.
Copycat, clone, mimic, "thief" and worse are labels that have been thrown at Rocket's founders, the Samwer brothers, as they have built up Europe's most successful Internet company creation franchise, leaving many bruised egos along the way.
Over the years, the Samwers have built and sold German versions of eBay, Facebook, Groupon and others. They describe their current undertaking, Rocket, as an Amazon or Alibaba for the rest of the world.
Frustrated Silicon Valley entrepreneurs say the Samwers make money by being fast copiers of their best business ideas. "More like a low-class thief," Jason Calcanis, a serial entrepreneur and angel investor, recently tweeted about Oliver Samwer, Rocket's chief executive. Calcanis hosts the yearly Launch Festival for start-ups and investors in San Francisco.
But a growing number of fans turn this epithet around and describe Rocket's approach as taking "proven ideas" and making them work in far-flung emerging markets before others get there.
"Nothing to gain from Schadenfreude. The ecosystem needs success stories!!," tweeted Gabriel Matuschka, co-founder of Berlin Tech Meetup and an investor with Partech Ventures.
"What is lacking in Europe is the incredible culture of risk the USA has. What the Samwers have done is awesome," serial Spanish entrepreneur Martin Varsavsky told Reuters. France's Orange SA recently agreed to buy Jazztel, a broadband company he founded in 1997, for 3.4 billion euros (US$4.3 bln).
TOUGH FIRST DAY
Founded by brothers Oliver, Alexander and Marc Samwer, Berlin-based Rocket Internet has set up e-commerce sites and online markets for everything from taxis to meal deliveries in more than 100 countries. Rocket claims it can launch a company within 100 days by drawing on expertise at its Berlin head office in areas such as finance, communications, marketing and business intelligence, helping it start from three to six new business lines a year.
Oliver prides himself on his ruthless ability to execute on good ideas, rather than generating unique ideas himself.
"The most difficult thing is to build up a company," Samwer told German TV on Thursday. "And whoever's first in the world today, that doesn't mean they'll still be first tomorrow."
The Rocket IPO came on the same day that the creator of best-selling mobile game Angry Birds, Rovio, once one of Europe's hottest tech start-ups, said it would lay off 16 percent of its workers, highlighting the sector's risks.
Rocket sold shares worth 1.4 billion euros, nearly double the 750,000 euro amount it signaled a few weeks earlier when it filed to go public, as international investors appeared to eagerly anticipate Germany's largest IPO offering since 2007. Expectations had been fueled after China's Alibaba saw a 38 percent first-day gain two weeks ago in its own IPO listing.
But it suffered a rocky first day of trading on Thursday on the Frankfurt exchange, falling as much as 14 percent from its opening price of 42.50 euros.
Rocket's volatile trading came a day after the disappointing debut of online fashion retailer Zalando , which the Samwer brothers also helped found.
"These two market debuts have destroyed the IPO market for the time being," one Frankfurt market strategist said.
THE CASH QUESTION
The build-up to Rocket's stock market listing has coincided with a suddenly frank debate by some of Silicon Valley's top venture capitalists over whether financiers are sowing the seeds of a tech investment bubble akin to the dot-com era.
The debate has centered on burn rates -- the pace at which companies consume capital before needing to raise new money.
In the U.S. alone, VCs poured $13.0 billion into 1,114 financing deals in the second quarter of 2014, reaching start-up funding levels last seen in 2001, according to Thomson Reuters data. The figures were skewed by unprecedented funding of a handful of firms, including a record $1.2 billion in online taxi and ride-sharing service Uber, valuing it at $18.2 billion.
"When the market turns, and it will turn, we will find out who has been swimming without trunks on: many high burn rate co's will VAPORIZE," tweeted Marc Andreeesen, a co-founder of dot-com darling Netscape and now a major VC in Silicon Valley (http://goo.gl/XZHB7f).
Andressen Horowitz, his firm, was tied for the lead in terms of the number of deals completed last quarter.
In Germany, stock market critics complain of a "dangerous euphoria", reviving painful memories among investors of the mercurial rise and crash of the Neuer Markt exchange in the early years of the millennium - Germany's own dot-com bubble.
One major German investor said ahead of the Zalando and Rocket IPOs that "never in my life" would he own either stock. And Klaus Nieding, vice president of the German Association for Investor Protection, agreed: "This is not for safety-conscious retail investors. It is a speculative investment."
The Samwers, who own 52.3 percent of their company, aim to use the IPO proceeds to transform Rocket from a minority investor in start-ups it helps create into a unified ecommerce operation that can beat far bigger rivals Alibaba and Amazon.
To get where it is, Rocket has taken on an estimated $2 billion in financing and burned through cash to build out its network of ecommerce companies. It held 80 million in cash at the end of June, down from 437 million euros in December.
SAMWER STRATEGY
The Samwer's ambitious strategy is to dominate e-commerce in many emerging markets by partnering with local telecom and logistics companies to be the first to create the necessary infrastructure to allow online shopping via phones.
Samwer says Rocket aims to retain majority control in its businesses longer term, but does not rule out further IPOs of existing businesses in order to raise more cash.
Some ask how it can be both an investor and an operator of a global businesses, which depends on results from its units.
"It's a one-way ticket. You can't hedge your bets when it comes to business models," says Richard Windsor, founder of Radio Free Mobile, an independent research house, who was previously was global technology analyst for Nomura in London.
"Either you have an incubator concept, and when the companies you create are ripe, you IPO them. Or you integrate them all together to create one big e-commerce company... If you integrate them together, that necessarily means no more IPOs."
(1 US dollar = 0.7900 euro)