Naspers – a South African media, tech and investment firm, had made an investment of $32 million in 2001 for a significant share in a Chinese tech start up and it is deriving rich benefits of that single bet.
Tencent was that Chinese startup – the owner of the largest messaging app in China – WeChat as well as a range of payment apps and mobile games. In March this year, the company reached a valuation of $175 billion and at that time, almost $10 billion was raised by Naspers by just selling two percent of its stake in the company. It earlier owned 33 per4 cent stake in the company.
That initial investment has helped the South American company to now complete with global giants like Amazon, Facebook and Netflix. Naspers began as a small publishing house and now it has operations in over 120 countries.
“I love Naspers. They have an exceptional portfolio of Internet, media and e-commerce assets,” said Paul Theron, an investor in Naspers and CEO of the asset management firm Vestact. “To have snapped up that piece of Tencent, it’s an incredible story.”
There have been other successful investments made by the company even though Tencent has been its most successful investment so far by a long way.
Selling of its 11% stake in India’s e-commerce platform Flipkart helped the company to raise $1.6 billion in May. Naspers first invested in Flipkart in 2012.
Food delivery services, mobile payments and classified ads are the three areas that are the most promising as investment potential looking forward, said Naspers CEO Bob van Dijk.
Brazil, Russia, India, China and South Africa, are the markets where Naspers is looking for growth and it has 90 per cent of its investments there.
There have however been some problems for the company in recent years. Naspers has undergone considerable restructuring, selling lagging businesses and consolidating similar ones. The remuneration policies of the company have also come under questions.
But Naspers has become a force in the tech industry because of its range of global investments and assets.
More recently, the company has made some investments in the Indian food delivery startup Swiggy, which has been described as “the fastest growing company I’ve seen in a decade” by van Dijk. Another company in Naspers’ portfolio is the largest food delivery firm in South America – Brazil based iFood.
Naspers also owns PayU – which has operations in 17 developing markets and is the largest online payment platform in those markets.
The quality of its employees is the key to the success of Naspers, says Van Dijk. The copany has poached such employees from firms like Paypal, Mastercard, eBay, Facebook and Google.
“We’ve attracted some of the best in the internet space,” he said.
Naspers also is bale to get a “front row seat” of the innovation taking place in China because of its close association with Tencent.
“It’s really helped us to see trends in other parts of the world way ahead of others,” said van Dijk.
(Adapted from Money.CNN.com)