Naspers marks ‘bil­lions’ for tech in­vest­ments

The Citizen (Gauteng) - - BUSINESS -

Naspers is keen to con­tinue its search for e-com­merce and tech in­vest­ments, and happy to de­ploy a size­able war chest in its hunt for deals.

“We have sev­eral bil­lion in cash and un­der­utilised credit fa­cil­i­ties,” Naspers CEO Bob van Dijk said. “We have room to in­vest in the fu­ture.”

Naspers has be­come one of the world’s largest in­vestors in e-com­merce ven­tures as it tries to build on the suc­cess of its early in­vest­ment in Chi­nese tech gi­ant Ten­cent Hold­ings – a com­pany now worth $472 bil­lion (R6.777 tril­lion).

“In time, Naspers could be­come an even bet­ter in­vest­ment al­ter­na­tive than Ten­cent,” said Ger­rit Smit of Stone­hage Flem­ing Eq­uity Man­age­ment. “Naspers is cur­rently in a heavy in­vest­ment cy­cle and spend­ing money on build­ing sub­stance in emerg­ing mar­ket e-com­merce and other on­line busi­nesses.”

Van Dijk has been ac­cu­mu­lat­ing in­ter­net tech­nol­ogy ac­qui­si­tions since tak­ing the helm in 2014. In May and Septem­ber, Naspers in­vested €1.05 bil­lion (R17.66 bil­lion) in Germany’s De­liv­ery Hero, and has been in­volved in 14 deals worth $1.94 bil­lion (R27.85 bil­lion) this year alone, ac­cord­ing to data com­piled by Bloomberg.

Much of this deal spree has been funded by the sale of Pol­ish on­line auc­tion site Al­le­gro for $3.25 bil­lion (R46.67 bil­lion) last year. Al­though Van Dijk added that fu­ture in­vest­ments would be “op­por­tunis­tic”, there was no in­di­ca­tion spend­ing will slow down. “We’ve tra­di­tion­ally been fo­cused on growth mar­kets,” he said. “That’s still true. But on the other hand, we are look­ing at growth op­por­tu­ni­ties re­gard­ing ge­og­ra­phy.”

Naspers’ ven­tures arm has been col­lect­ing e-com­merce com­pa­nies. In­vest­ments this year in­clude lead­ing an $80 mil­lion (R1.148 bil­lion) in­vest­ment in In­dian food or­der­ing and de­liv­ery plat­form Swiggy in May, and in Jan­uary lead­ing the $175 mil­lion (R2.512 bil­lion) fund­ing in US used goods mar­ket­place Letgo.

Van Dijk said he might look at con­sol­i­dat­ing some of th­ese in­vest­ments, if the “op­por­tu­nity came up.” He has also flagged fin­tech as a fo­cus area. In Oc­to­ber, Naspers an­nounced that its fin­tech in­vest­ment di­vi­sion PayU led a $115 mil­lion (R1.65 bil­lion) in­vest­ment round in Remitly, a US dig­i­tal re­mit­tance startup.

Not ev­ery­one thinks con­tin­u­ing its ven­ture cap­i­tal spree is the best al­lo­ca­tion of Naspers’ re­sources. In­stead it should buy back its own shares to take ad­van­tage of the dis­count be­tween its share price and the value of its stake in Ten­cent, ac­cord­ing to vet­eran emerg­ing mar­kets in­vestor Mark Mo­bius.

“The sit­u­a­tion right now is that all the in­ter­net com­pa­nies are very pricey,” Mo­bius said. – Bloomberg

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