Technology investment company Naspers is actively exploring investment opportunities in startups across Africa, aiming to leverage its scale to transform small businesses into major players on the continent.
Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, shared in an interview with CNBC Africa at the World Economic Forum in Davos that the company sees numerous prospects in the digital sector and is continuously evaluating them.
Highlighting recent investments in Egyptian startups, Mahanyele-Dabengwa revealed that Naspers is also eyeing attractive small businesses for potential acquisitions.
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The company’s investment strategy focuses on early-stage ventures and scaling them up collaboratively, a formula that has proven successful in its previous investments. She emphasized the importance of identifying founders with whom Naspers can work closely to expand their businesses.
Equally crucial to this strategy is having the right individuals involved to support and guide founders in starting and growing their businesses. Naspers aims to replicate this approach in South Africa by investing early and assisting startups in navigating the challenging operating environment.
Mahanyele-Dabengwa explained that by investing in and nurturing such businesses, Naspers can make a significant impact on the continent, generating employment opportunities and fostering entrepreneurship.
An illustrative example of Naspers’ investment strategy is Takealot, a South African online retailer. Starting as a small business just 12 years ago, Takealot now provides a platform for over 9,000 small, medium, and micro enterprises to sell their products.
Without Naspers’ investment and support, many of these businesses would not have thrived. However, Takealot faces a challenging future with the impending arrival of Amazon in its home market.
In response to Amazon’s entry, Mahanyele-Dabengwa stated that Naspers is increasing its investment in Takealot to help it compete effectively. She highlighted the company’s commitment to bolstering its businesses, ensuring they are well-positioned to navigate any challenges posed by Amazon’s presence.
Takealot has been expanding its services, including offering one-hour delivery for a wide range of products, from phone chargers to toys.
Currently, e-commerce constitutes only about 4% of South African retail, presenting a significant opportunity to grow the market three to five times faster than peer countries. According to a study by market research firm World Wide Worx, online retail sales in South Africa grew by 30% to R55 billion in 2022.
Mahanyele-Dabengwa expressed optimism about Amazon’s entry into the market, stating that it is beneficial for South Africa. She believes Takealot is well-positioned, given its deep understanding of the local market.
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