Cash-flush Naspers to invest R4.6bn in SA’s tech sector and black-owned start-ups
Naspers is sitting on a large cash pile after trimming its stake in China’s Tencent and selling its investment in India’s Flipkart
Cash-flush Naspers says it will invest R4.6bn in SA’s technology sector over the next three years, partly through a new fund that will put money behind black-owned start-ups.
The group made the announcement on Friday at SA’s inaugural investment conference, where companies pledged new investments worth a total of more than R100bn.
Naspers is sitting on a large cash pile after trimming its stake in China’s Tencent and selling its investment in India’s Flipkart.
Thanks to those sales, the group has about $10bn on its books.
About a fifth of that will go towards buying out minority shareholders of underlying group companies, while the rest will go towards new growth opportunities, particularly in classifieds, online food delivery and fintech, management has said.
Naspers said on Friday that over the next three years, it would spend R3.2bn on the development of its existing technology businesses in SA, including OLX, Takealot and online food delivery service Mr D Food.
It would also launch a R1.4bn start-up fund, called Naspers Foundry, in 2019.
The fund would invest in and support local technology start-ups “seeking to address big societal needs”.
“The Naspers Foundry aims to both encourage and back South African entrepreneurs to create businesses which ensure SA benefits from this technology innovation,” Naspers CEO Bob van Dijk said.
Naspers CFO Basil Sgourdos said “a significant portion” of Naspers Foundry’s investments would go towards black-owned start-ups.
Vestact portfolio manager Byron Lotter said in a note to clients the announcement “is great news”.
“The tech start-up scene in SA is of a very high standard… I personally have seen some amazing ideas coming online. Naspers, who have made billions out of their Tencent investment, are now bringing some of that money home,” Lotter said.
“This is a big boost to our economy, largely thanks to Cyril [Ramaphosa's] stimulus plan and his encouragement to invest in SA.”
Dragged lower by its Tencent investment, Naspers shares closed 3.27% down at R2,559 on Friday.