Naspers fund to develop start-ups
A new R4.6bn technology fund could become the venture capital market for start-ups in SA.
Almost a third of the fund, R1.4bn, will be for an initiative called Naspers Foundry, earmarked for “technology start-ups seeking to address big societal needs”, Naspers said in a statement issued at the SA Investment Conference.
The Foundry will focus on start-ups, meaning they will not necessarily be making a profit. This is in contrast to the traditional technology investment strategy pursued by Naspers.
In 2001, it paid $32m (R467m) for a 34% share in China’s $400bn (R5.8-trillion) giant Tencent at a time when it was worth a fraction of its current value. In March, it trimmed that stake by 2%, raising almost $10bn (R146bn).
It has since been using this massive treasure chest to invest in technology businesses that shore up its classifieds and e-commerce investments.
The Naspers Foundry represents the largest local fund ever directed at earlystage start-ups.
Most local venture capital funds insist their prospects already generate profits, or at least substantial revenue. It is almost unheard of for local venture capital firms to fund the creation of a new business.
Naspers CEO Bob van Dijk said: “The Foundry aims to both encourage and back South African entrepreneurs to create businesses which ensure SA benefits from technology innovation.”
CFO Basil Sgourdos said the company understood what it was like to build and grow tech businesses.
“A significant portion of the Foundry investment will be focused on blackowned South African start-ups,” he said. The balance of the R4.6bn investment will be focused on Naspers’s existing local businesses.