The big chance for takealot
While takealot is already South Africa’s leading e-commerce retailer, it needed cash to scale up. A huge investment by Naspers is making that possible.
ffast-or growing online businesses operating in a fiercely competitive world, staying ahead of the game is a cash-burning exercise. Last month’s R960m investment by Naspers* in takealot, which owns online retailers takealot and Superbalist as well as Mr D Food and Mr D Courier, gives takealot the cash it needs to scale up.
“Our models are well-established, but these businesses need cash to scale,” says founder and CEO Kim Reid.
“We are not trying to build a small retailer,” he says. “We are investing in our platform and in attracting new users.”
For companies like takealot, attracting more users and making more sales increasingly offsets high fixed overheads, and profitability increases. In this type of business, scale is everything.
“We have wanted to raise cash to be Founder and CEO of takealot sustainable and to cement our future, and this investment is exactly what we need to ensure our sustainability,” Reid says.
While fast-growing online companies may not be short of investor interest, Reid says it takes time and effort to raise cash and it can take one’s eye off the ball and be disruptive to business.
takealot.com was launched in June 2011 following the October 2010 acquisition of e-commerce business Take2 by Reid and US-based investment firm Tiger Global Management. takealot now claims to be the leading e-commerce retailer in South Africa and “one of the largest, most innovative e-commerce retailers on the African continent”.
This is Naspers’s second investment in takealot, the first taking place alongside takealot’s merger with kalahari in 2015. Last month’s investment,