Picture: ISTOCK
Picture: ISTOCK

Naspers will invest another $500m (R6.7bn) in letgo, the unprofitable New York-based mobile classifieds app it first bought into in 2015.

Africa’s biggest company is sitting on more than $10bn in net cash after trimming its stake in China’s Tencent and selling its shares in India’s Flipkart to Walmart.

It has been scouring the globe in search of investment opportunities in the classifieds, online food delivery and fintech segments, both in existing businesses and new ventures. By doing so, it hopes to convince investors that it is more than just a cheap entry point into Hong Kong-listed Tencent.

On Wednesday, letgo, which is yet to reach profitability, said Naspers had committed to invest $500m of new capital in the company, $150m of which had already been transferred. The second-hand e-commerce platform said the funding would be used to boost its growth, for "product evolution", to enter new verticals, and for its monetisation efforts. The start-up’s app has been downloaded by more than 100 million people, mostly in the US.

The number of monthly "listers" on its marketplace had grown 65% since the start of 2018, letgo said.

Co-founder of letgo Alec Oxenford said: "We are fuelling unprecedented growth in the second-hand economy through meaningful innovation."

Image-recognition technology is used by letgo to suggest titles, prices and categories for images that its users post.

Martin Scheepbouwer, CEO of OLX Group, through which Naspers has invested in letgo, said letgo had established itself as one of the most promising start-ups in the world by injecting excitement, new technology and fresh thinking "into a space that has lacked all of the above for decades in the US".

Naspers invested $2.2bn in six companies in the financial year to March. Its classifieds business, excluding letgo, turned profitable in the year to March.