Berlin's Tech Scene Sizzles as Marquee Startup Fizzles

Rocket Internet, the core company of Berlin's start-up scene, is not doing too well. It recently posted a profit warning, telling investors of big writedowns in its fashion business. Its stock performance since the initial public offering two years ago -- the biggest for a European tech company since the dot-com boom of the late 1990s -- has been abysmal. The Berlin tech scene, however, remains the hottest in Europe and isn't suffering along with the behemoth that helped create it.

Rocket Internet lost 617 million euros ($693 million) in the first half of 2016, in large part because the latest funding round of one of its more mature businesses, the Global Fashion Group, reduced its valuation and forced a writedown of goodwill and intangible assets. GFG sells mid-range clothing brands in 24 countries and it includes some of the oldest businesses created by the Berlin start-up factory.