Perhaps it’s the clocks going back this weekend that makes me want to turn my attention to my home, South Africa. Or it might be the arrival of Naspers in our papers this week, the South African firm whose $5bn hostile bid for Just Eat has made quite a splash. Despite being one of the biggest news stories to break in the consumer sector this week, it may well have left a lot of people scratching their heads: Naspers is a relative unknown quality in the UK.
The $4.9bn offer was made by the company’s Dutch subsidiary, Prosus, disrupting the already-underway merger deal between Just Eat and Takeaway.com, also out of the Netherlands. Combined, Just Eat and Takeaway.com processed 360 million orders in 2018, worth €7.3bn. A merger between the two businesses would create one of the world’s largest online food delivery companies.
At the time of writing, Just Eat has rejected the so-called ‘hostile takeover bid’ and will go ahead with the proposed merger. Despite a lack of tangible results for Naspers, the development has served to propel the company into UK consciousness – and reminded me that maybe we should be paying more attention to the South African tech scene and its operations across the world.
There is a close-knit and tech-led relationship between China and South Africa, for example. Across South Africa, Chinese firms like Huawei, ZTE and China Telecom underpin much of the country’s vital IT infrastructure. Alibaba is also enjoying a growing presence in the region, having recently rolled out its payment service Alipay, while just this week, evidence of the ever-closer commercial ties between the two countries saw the South African Tourist Board announce a partnership with Chinese internet giant Tencent to drive Chinese tourism in the country. Through a series of digital marketing campaigns on Tencent’s platform WeChat, the tourist board will be able to directly access potential Chinese visitors to promote South African travel.
While South Africa’s use of Chinese tech is widely publicised, the symbiotic nature of the relationship often gets ignored – and Tencent’s link with South Africa goes well beyond a couple of mobile ads.
Back in 2001, Naspers staked its claim in the global tech industry by betting on Tencent Holdings in its early days as a Shenzhen-based startup. As a result, Naspers’ Prosus arm holds an enormous 31% stake in the tech behemoth, which currently has a market capitalisation of more than $400bn. To offer some context on the lucrative nature of this early deal: last year Naspers took $9.8bn from the sale of a 2% stake in Tencent.
Looking at Naspers’ portfolio of investments simultaneously sheds light on the company’s interest in Just Eat, and demonstrates the global reach of South African investment in tech.
Looking at Naspers’ portfolio of investments simultaneously sheds light on the company’s interest in Just Eat, and demonstrates the global reach of South African investment in tech. A $40m investment in Brazil’s mobile company Movile opened the door to food delivery when it developed iFood in 2015. Only two years later, Naspers injected €380m into Germany’s Delivery Hero. In India, the firm invested $80m in food delivery concept Swiggy, and has also backed Flipkart – the country’s leading ecommerce site and latest brand to jump on the food delivery bandwagon. And it’s not just Naspers: South African telecoms company MTN is the biggest shareholder of the Nigerian-based ecommerce site Jumia, dubbed the Amazon of Africa.
Earlier this year, the World Economic Forum on Africa was held in Cape Town. President Cyril Ramaphosa made it clear that the country is pivoting its economic focus toward the technology industries – and embracing what’s being called the ‘fourth industrial revolution’.
Not only should this mean more South African tech activity at home, but also on the world stage. It will be exciting to see what the future holds for tech in South Africa. In the meantime, my money is on the Boks beating Wales on Saturday in Japan.