Naspers Rides High On India Portfolio With PayU Performance, Flipkart Stake Sale

Naspers Rides High On India Portfolio With PayU Performance, Flipkart Stake Sale

SUMMARY

PayU India accounts for more than half the overall business of PayU

Naspers continues to build a broader credit platform in India

Gained a 29% return on Flipkart sale, invested an additional $79 Mn in Swiggy

PayU India accounted for more than half the overall business of Netherlands-based PayU, the payments arm of tech investor Naspers.

According to the half-yearly financial statement of Naspers, for the period ending September 2018, the company said, “PayU recorded strong growth in its core (payment service provider) business.”

The financial report for H1 FY19 reported a 35% increase in the number of transactions processed, to over 400 Mn, generating a total payment transaction value exceeding $14 Bn (INR 99,071 Cr) on the PayU platform. Overall, the business delivered revenue growth of 36% to $171 Mn (INR 1,210 Cr).

Earlier, in September 2018, PayU India also received approval from the Reserve Bank of India (RBI) to operate its own non-bank financial company (NBFC), which is subject to certain pending RBI compliance

Naspers is growing well in the fintech segment globally. In India, its flagship product LazyPay gained significant traction, reaching over 450K consumers and issuing more than $4 Mn (INR 28.3 Cr) in loans per month. For the uninitiated, LazyPay was the consumer brand of Indian fintech company Citrus Pay, which Naspers acquired in September 2016 for $130 Mn (INR 919.9 Cr).

Further, its investments in Indian credit-portfolio companies also continued to perform ahead of its expectations. PaySense and ZestMoney each issued over $7 Mn (INR 49.5 Cr) in loans per month. According to Naspers’ financial report, in July 2018 the group invested an additional $12 Mn (INR 84.91 Cr) in PaySense and now holds a 19% effective interest (17% fully diluted) in the company.

“In India, we continue to build a broader credit platform, which is supporting encouraging progress across all our initiatives. We merged Europe, Middle East and Asia (EMEA) and Latin American businesses, realising significant efficiencies and cost reductions. Revenue scaling, coupled with cost compression, enabled us to substantially improve profitability in the segment,” the report added.

The South Africa-based internet and media company also gained a 29% return (at internal annual return rate) on its investment in Indian ecommerce unicorn Flipkart by selling its 12% stake to US retailer Walmart for $2.2 Bn (INR 15,568.3 Cr). It is now looking to solidify its investments in startups that are operating in the food delivery, classifieds, and fintech segments in India.

“The group invested an additional $79 Mn (INR 559 Cr) in Bundl Technologies Private Limited (Swiggy), an online food ordering and delivery platform in India, during July 2018. Following the investment, the group holds a 25% effective interest (23% fully diluted) in Swiggy,” the report mentioned.

Swiggy raised two big rounds of funding this year including:

  • $210 Mn (INR 1,486 Cr) Series G led by existing investor Naspers and new investor DST Global (June 2018)
  • $100 Mn (INR 707.6 Cr) Series F round led by Naspers and existing shareholder Meituan-Dianping (February 2018)

Other significant disposals by the group during the reporting period included sale of its 52% interest in Gurugram-based Tek Travels Private Limited (Travel Boutique Online), its online B2B travel distribution business, for $37 Mn (INR 261.8 Cr).

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