Mumbai | Bengaluru: Prosus, the Dutch-listed arm of Naspers, which laid a massive bet on the Indian digital payments industry earlier this week when it announced a $4.7-billion acquisition of BillDesk, expects the domestic market to see substantial outcomes for investors amid a rush of capital flow into the country, Bob van Dijk, group chief executive of Prosus told ET.
The investment firm, among the largest technology investors globally that has ploughed close to $10 billion across a host of Indian internet startups including the likes of Flipkart, Swiggy and Meesho, is convinced of the Indian market’s potential to deliver hefty returns to even later-stage investors like the South African group, van Dijk said in an exclusive interview. “We invested about $1.5 billion in payments and fintech over the years, which is now worth more than three times. This is a great organic growth story,” said van Dijk, who is also CEO of Naspers. “We also realised that if you want to get to scale — and being at scale is incredibly important in the payments business — in some cases you are better off joining forces and doing an M&A.”
Following the acquisition, the combined entity of BillDesk and PayU, which is the global payments brand of the tech multinational, will emerge as one of the top online payments providers — both globally and locally — with an annual total payment volume (TPV) of $147 billion.
Indian startups have racked up unprecedented capital this year, notching up nearly $20.76 billion as of August 20, according to data provided by industry tracker Venture Intelligence. As many as 25 new unicorns, a tech industry parlance for companies valued at $1 billion or more, have been birthed this year.
“There’s obviously a lot of money floating around. And that leads to large transactions, but I think it’s justified by the potential of the market,” van Dijk said.
“The businesses we’ve backed have tremendous upside from even where we are investing. BillDesk is a great example of that. The same works for companies like Meesho, Swiggy, Urban Company, Elastic Run, PharmEasy, and others. There is significant money that is being paid, but the upside is tremendous, in our view,” he added.
China Market
Prosus, which has been operating for more than 15 years in India and is now stepping up the pace of its investments in the country, has not seen any impact on its allocations and strategy in the aftermath of the Chinese government’s clampdown on technology companies, according to its CEO.
Naspers holds a 29% stake in China’s Tencent through Prosus but doesn’t invest directly in China.
“Ups and downs, in the near term, really don’t influence a strategy. Not in India, nowhere else either,” he said.
Beijing’s crackdown as it pushes the “common prosperity” agenda, resulted in the tech conglomerate Tencent’s shares sinking almost 50% from its February peak, as per a Bloomberg report.
