MICROCAPITAL BRIEF: Philippine Long Distance Telephone Company Purchases 10% Equity Stake in Rocket Internet for $445m with Eye on Mobile Payments

The Philippine Long Distance Telephone Company (PLDT), a Philippines-based telecommunications company, reportedly has purchased a 10-percent stake in Rocket Internet, a Germany-based web service provider and e-commerce investment firm, for EUR 333 million (USD 445 million). The investment by PLDT was made with the stated aim of developing electronic, specifically mobile, payment technologies in developing countries. As a result of the investment, Rocket will issue new shares and a PLDT executive will sit on Rocket’s supervisory board.

According to a statement attributed to Napoleon Nazareno, the president and CEO of PLDT, “The partnership will allow [the companies] to leverage our combined strengths in developing online and mobile payment solutions in emerging markets.”

As of 2013, companies in Rocket’s investment portfolio reported revenue of EUR 700 million (USD 934 million). In the same year, Rocket raised USD 500 million to invest in startups in Africa, Latin America and Russia [1]. For the 2013 fiscal year, PLDT reported total assets of PHP 400 billion (USD 9.1 billion) and total revenue of PHP 168 billion (USD 3.9 billion) [2].

By Benjamin Krupp, Research Associate

About Philippine Long Distance Telephone Company (PLDT)

Philippine Long Distance Telephone Company (PLDT) was established in 1928 and is a Philippines-based telecommunications company that offers fixed line and mobile products. For the 2013 fiscal year, PLDT reported total assets of PHP 400 billion (USD 9.1 billion) and total revenue of PHP 168 billion (USD 3.9 billion). PLDT owns a 10-percent stake in Rocket Internet.

About Rocket Internet

Rocket Internet is a Germany-based web service provider and e-commerce investment firm that was established in 2007. Companies in Rocket’s investment portfolio employed approximately 20,000 people in 100 countries and reported revenue of EUR 700 million (USD 934 million) as of 2013. In the same year, Rocket raised USD 500 million to invest in startups in Africa, Latin America and Russia. Rocket is 10-percent owned by Philippine Long Distance Telephone Company as of 2014.

Sources and Additional Resources

[1] Internet Retailer: Rocket Internet Raises $445 million to Invest in Mobile Payments in Emerging Markets

[2] PLDT: Financial Review 2013

MicroCapital, August 2, 2014: Bangko Sentral Ng Pilipinas (BSP) Increases Maximum Microinsurance Benefits for Client in the Philippines to $11k

MicroCapital, April 25, 2014: United Nations, Smart Communications, Land Bank of Philippines Use Mobile Money in Recovery from Typhoon Haiyan (Yolanda)

MicroCapital, December 5, 2012: Smart Communications to Launch Mobile Microfinance Service Provider mBank Philippines

MicroCapital Universe Profile: Philippine Long Distance Telephone Company (PLDT)

MicroCapital Universe Profile: Rocket Internet

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