Naspers marks ‘billions’ for tech investments

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