Watch R8bn Naspers tech war chest

Last month, bosses of Naspers unveiled plans to pour $315 million into South African tech startups.

That’s small compared to SoftBank’s $93 billion Vision Fund, powered in part by Saudi petrodollars. But the emerging market internet giant’s $8 billion (R114 billion) tech war chest is still worth watching.

Africa’s largest listed firm has been defined by one epoch-making deal – buying a third of Tencent for $36 million in 2001.

At the Chinese internet giant’s valuation peak in January, the stake was worth over $180 billion, roughly 45% more than Naspers.

One way of narrowing the discount between the value of the stake and of Naspers is to sell off bits of Tencent to reinvest in startups.

Since doing that this year to create the $8.2 billion fund, Naspers shares have struggled amid concerns the cash will be wasted.

Since the fund was announced on June 22, Naspers’ 14% decline has wiped $12 billion off its market value.

Over the same period, the value of its remaining Tencent holding has lost $39 billion, a 26% drop.

A focus on emerging markets means Naspers’ version of the Vision Fund is shielded from big losses by the relatively small amounts that can be invested – in Africa’s nascent tech sector, $300 million goes a long way.

And not everything touches will turn to dust.

In May, Naspers sold an 11% stake in Indian e-commerce startup, Flipkart, for $2.2 billion, after investing $616 million. –