Naspers to spend over $300 million seeking its first major African tech startup boost

Africa’s most valuable company is putting more of its vast war-chest of investment dollars to work in South Africa.

Naspers, the Cape-Town based giant, has announced plans to invest $314 million in tech businesses in South Africa over the next three years. Of that amount, around $92 million will be committed to Naspers Foundry, a startup fund for tech businesses. The fund, Naspers says, “aims to fund and support South African technology start-ups seeking to address big societal needs.” Naspers will spend the remainder on startups it has already invested in, including OLX, delivery service Mr D Food and e-commerce firm, Takealot.

The fund and the focus on South Africa could have an outsize impact on the country’s tech startup ecosystem and could in turn attract more tech investment dollars to countries beyond South Africa. But that might depend on whether it has relatively early successes.

Naspers’ growing commitment to funding local startups is crucial as, having morphed from largely being a traditional newspaper media company into an internet conglomerate, the company is best known for its large investments outside Africa. Its $32 million bet on a 46.5% stake in Tencent, the Chinese internet company, in 2011 was the key to its overall transformation. As Tencent’s valuation has since shot up, so has Naspers’ stake which is now worth over $100 billion. Back in February, Naspers led a $100m Series F investment in Swiggy, an Indian online food ordering and delivery platform. The company has also backed Flipkart, the Indian e-commerce company, with a $616 million investment—a move that paid off when its 11% stake was sold for $1.6 billion in May.

But Naspers is yet to find similar success in Africa. So far, several of its investments on the continent in classified platforms and e-commerce marketplaces—notably including Nigeria’s Konga—have been written off. An obvious factor in the disparity in the size of Naspers’ investments within and outside the continent is the nascent stage much of Africa’s tech ecosystems are still in. Crucial features of seamless e-commerce such as online payments and delivery logistics are still relatively new in many parts of Africa. But increased funding from Naspers and other investors will be critical to solving these issues as tech startups across the continent look to win swathes of market share in quickly urbanizing African cities with growing middle-class populations.

Naspers’ funding drive is also likely part of efforts to define itself as a global internet company more than anything else. Last month, Naspers announced plans it would spin off its lucrative video entertainment business—made up of pay TV giant MultiChoice and streaming service Showmax—on the Johannesburg Stock Exchange next year. CEO Bob van Dijk explained the move as part of Naspers’ “evolution into a global consumer internet company.”