Naspers Banks On Food Delivery As The Next Big Thing

Naspers Banks On Food Delivery As The Next Big Thing

food delivery
Naspers believes that the online food-delivery market may provide the next big investment opportunity worth billions of dollars. Photo by Nathan Cowley from Pexels

Cape Town-based tech giant Naspers is looking for the next big investment success story and believes food delivery is where the opportunity lies.

Naspers CEO Bob van Dijk said he believes in the potential of online food delivery globally, calling it “probably the largest opportunity I’ve run into in my lifetime” during an investor roadshow, according to Techcentral.

Van Dijk said he believes that the way people consume food will change drastically in the future, comparing home cooking to how people used to make their own clothes a century ago.   

“The notion that people gather a bunch of ingredients from a shop and put things together three times a day, 30 times a month — that’s not the way things are going to work anymore,” Van Dijk said

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Naspers already has interests globally in the food-delivery sector, including Mr. Delivery in South Africa, Swiggy in India, Germany’s Delivery Hero and iFood in Brazil.

The online food-delivery market in India alone is estimated to be worth $7.7 billion in 2019. Brazil’s market is worth $2.47 billion and Germany’s food-delivery market is valued at $2.02 billion this year.

The same sector is worth an estimated $713 million in South Africa this year.

At the end of 2018, Naspers announced it was making a $660 million investment as part of an almost $1 billion Series H round in Swiggy, India’s largest food-delivery platform, according to Forbes.

Swiggy’s value rose to more than $2 billion after Naspers led two previous funding rounds earlier in 2018 to become the firm’s biggest shareholder.

Naspers is also the biggest shareholder in Germany’s Delivery Hero following a $775 million investment in September 2017, bringing Naspers’ stake to 22.75 percent.

In 2018, Naspers was part of a $400 million funding round in iFood, the largest online food-delivery platform in Brazil.

At the end of 2018, contributions from Naspers’ food-delivery segment tripled revenue growth to $181 million, Fin24 reported.

Naspers’ newly formed entity, Prosus, which was listed on the Euronext stock exchange in September, holds the group’s online food-delivery tech firms outside of South Africa. Naspers owns 73 percent of Prosus.

While investment is part of the support that Naspers is offering the food-delivery companies in its portfolio, it does not stop there. 

Naspers sent a task force of around 40 people to Brazil in 2018 to help iFood build out a new artificial-intelligence strategy, helping the company reduce prices by predicting where and when people will want a certain food.

Naspers is the South African consumer internet giant that struck gold with a $32 million investment in Chinese firm Tencent in 2001 that is now worth $138 billion.