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.

Finweek English Edition - - ON THE MONEY - By Mar­cia Klein

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,

Kim Reid

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