Naspers’ $2.3bn in Indian firms since 2011 dwarfs SA tech investments [Updated]

UPDATE (12 August 2019): Naspers announced in a press release today that it had taken part as lead investor in a $125-million fundraise in Indian ecommerce startup Meesho. In June India’s Economic Times reported that Naspers was in talks with the startup which wanted to raise at least $120-million, just days after Facebook invested $25-million in the social commerce startup.

Drawn by its population of over 1.3 billion people and rapidly growing economy, SA internet giant Naspers invested almost $1.5-billion in three Indian tech companies in the last financial year — over three times the estimated $460-million the company has invested in South African tech sector since 2011.

While Naspers’s portfolio includes tech investments around the world — most notably its 31% stake in China’s Tencent — it’s India that the company now looks to have its eye on.

The three investments — in food delivery startup Swiggy, fintech PaySense and jobs platform Aasaanjobs — make up almost half of the company’s $3.1-billion in tech investments in the year to 31 March, reveals information in the tech giant’s 2019 provisional financial statements released last month.

Naspers put $1.5b in Indian firms in the last financial year — over three times what it’s put into the SA tech sector since 2011

On Friday (28 June) Indian publication Economic Times reported that Naspers is in talks with Indian startup Meesho which wants to raise at least $120-million, just days after Facebook invested $25-million in the social commerce startup.

Since 2011 Naspers has piled over $2.3-billion into Indian startups (see the below graphic of its investments in Indian and SA firms since 2011). It’s just about reclaimed that investment following the sale last year of its 11% stake in ecommerce site Flipkart for $2.2-billion.

It invested a total of $616-million between 2012 and 2017 in the site according to the tech giant — effectively generating a return of over three times its initial investment. Not bad going for an exit after just five years.

It’s other investments in India since 2011 include $140-million in Indian online ticketing platform RedBus in 2013 (going on the current dollar-rand price) and an investment of $121-million in Swiggy in 2017 and 2018.

‘We remain committed to SA’

In March Naspers announced its intention to list its international internet assets on the Euronext Amsterdam Stock Exchange in the Netherlands, with a secondary inward listing on the main board of the Johannesburg Stock Exchange (JSE).

The listing — which is expected to be made on 23 August — has raised concerns from some that the company is partly exiting South Africa and that it has done little to invest in the SA tech sector (see this opinion piece and its accompanying rebuttal from a former Naspers manager).

Naspers told Ventureburn last month that it remains committed to South Africa and its continued progress as it will continue to own Media24, Takealot and investments by its tech fund, Naspers Foundry (the first, a R30-million investment was made last month in SweepSouth — see here).

“Naspers has no intention to leave South Africa. We will remain the largest SA company listed on the JSE, which is something we are very proud of,” it said.

In addition, Naspers claims that according to its own research (carried in its 2018 integrated financial report), the company is among the top 10 largest taxpayers in South Africa.

Naspers paid and collected R8.8-billion ($772-million). This accounts for 55% of taxes paid and collected by the group globally. Most of this (58%) was collected from its video entertainment businesses.

Over R6.5bn in SA tech

Going on estimates by Ventureburn Naspers has since 2011 invested at least R6.5-billion (about $460-million) in local tech companies,

Most of this has been in Takealot. Moneyweb estimates (see this article) that Naspers has invested more than R4.5-billion ($320-million) in Takealot and now owns an effective 96% of the company. In 2018 Naspers reported that Takealot had over 600 employees at two distribution centres.

It has also invested in WeBuyCars, Luno and AutoTrader (which was founded in 1998 and which Naspers acquired in 2017 for $41-million or R580-million).

In September last year Naspers (through MIH eCommerce Holdings) acquired a 60% stake in WeBuyCars for R1.4-billion in WeBuyCars, which was founded in 2001 by Faan and Dirk van der Walt.

The deal in May was blocked by the Competition Commission and Naspers are currently appealing to the Competition Tribunal to overturn the commission’s decision.

According to a Fin24 article this month, Naspers has a stake of less than 20% in SA founded bitcoin platform Luno, which was founded in 2013 by Marcus Swanepoel, Francois Paul, Carel van Wyk and Timothy Stranex. It is not clear how much Naspers has invested in the company, however what is clear is that it was the lead investor in Luno’s R60-million Series-A round in 2015 (see this story).

Naspers also has a R30-million investment in on-demand cleaning platform SweepSouth. The investment, which was announced on Friday last week, is the first it’s made through its R1.4-billion venture capital (VC) fund Naspers Foundry, which is aimed at SA startups.

Naspers operates in over 120 countries, with over 24 800 employees in 2018, according to its 2018 integrated financial report.

But in recent financial statements it said it generates just four percent of revenue from South Africa — hardly a money spinner then.

The tech company may be committed in spirit to South Africa, but the country’s smaller population and moribund economy mean there are way more returns to be made in India and other larger emerging markets for investors.

Read more: Do you want to treat Naspers like a small family business? [Opinion]
Read more: The silent Naspers coup: how Koos Bekker gave away the family jewels [Opinion]
Read more: How Naspers could help find SA’s next great tech startups [Opinion]
Read more: Naspers to launch R1.4bn fund to back SA tech startups

Featured image: Flipkart via Facebook