Early-stage investments in disrupters have been key to the Naspers success story. The company’s massively profitable Tencent investment back in 2001 has come to define Naspers and was a big reason why the company listed its internet assets separately as Prosus. Now, with cash to spare, it’s likely we’ll see more of these investments from the South African giant in the future.

“We have a very healthy balance sheet,” CFO Basil Sgourdos recently told Business Live. “We have gross cash of $9 billion and net cash of $6 billion, so we’ve got lots of room to grow and expand.”

Speaking to Bloomberg Daybreak Australia, CEO Bob Van Dijk said the timing of the Prosus IPO was “perfect” thanks to classifieds turning profitable and the company’s organic growth. He reiterated that as a growth company, Naspers — and Prosus — is mostly active in emerging markets.

Van Dijk once again earmarked food delivery as a focus area, mentioning that the industry is expected to grow by 20 times in the coming years. He believes the secret to food delivery success is intimate knowledge of local operations. He said this is what sets Naspers investees apart from other food delivery companies. Naspers led a $1 billion Series H round in Indian company Swiggy in December.  It started its journey with the business in April 2017. Since then it’s more than doubled its gross merchandise volume and expanded to more than 42 cities.

Van Dijk considers machine learning to be the next frontier for Naspers. “I believe it’s going to be as transformational than mobile phones over time. It’s going to be relevant to all the businesses that we run.”  He mentioned intentions to invest in machine learning at the company’s recent AGM. “The amount of data is exploding — last year we collected more data in the world than ever before,” he told shareholders.

Naspers has also been investing in blockchain, most recently leading a $15 million round in Immutable Games. The start-up’s Gods Unchained game uses blockchain to manage in-app purchases — a technology Naspers could easily extend to its marketplace apps. The company led a $2.33 million seed funding round in blockchain platform DappRadar earlier this month and is working with Facebook to develop the social network’s cryptocurrency Libra. The latter will make it easier for customers to transfer funds through popular apps like WhatsApp and Instagram.

Van Dijk said that as long as Naspers understands the operations of a business, it can map a path to profitability. Naspers is prepared to stick with a company if this takes a while — as it did with many of its classified ventures. “As long as you know the model you’re investing in, you’ll be comfortable with a couple of years of losses. But in the end, obviously, it needs to make money.”

Van Dijk will be speaking on the subject of disruption at the TechCrunch Disrupt SF conference in the U.S. next months.



Print Friendly, PDF & Email

Related Articles