Prosus joins top league of global investors after India's BillDesk buy

Naspers' digital investment arm now has India exposure of $10 billion

It was already sitting pretty by investing in six Indian unicorns, including edtech start-ups Byju’s and Eruditus, food and delivery giant Swiggy, home services platform Urban Company, social e-commerce platform Meesho, and online healthcare platform PharmeEasy, which recently bought diagnostic laboratory Thyrocare.  

On Tuesday Prosus NV, the international digital investment arm of South African conglomerate Naspers, took their India game a notch higher by snapping up payment gateway BillDesk for $4.7 billion through its fintech company PayU. Incidentally, this is the largest deal in the country’s online space since 2018, when Walmart bought Flipkart for $16 billion.

The quiet aggression of Prosus is reflected in the fact that its total exposure in India has jumped from $6 billion to $10 billion almost overnight. It is now locking horns with big global private equity (PE) investors — it’s just shy of the $11 billion that the more well-known SoftBank has invested in the country in the last four years (the latter’s total investment in India is $17 billion). 

According to industry estimates, Prosus’s exposure in India is half that of global giants Brookfield and Blackstone, which have invested upwards of $20 billion in the country.  

Looking at it from another perspective, the value of the BillDesk deal is bigger than what sovereign fund PIF, the largest PE and sovereign investor in India last year, put into the country in three deals worth a total of $3.3 billion. It is also bigger than the $3 billion that PE giant KKR invested in India last year in a total of six deals, according to a Bain & Co report on VC funding. 

Though Prosus was nowhere in the top-10 investor list in the country in 2020, this year the company has been one of the most aggressive players in the startup space. Apart from the BillDesk deal, it has participated in fundraises of a total of  $3.4  billion till date, either as a lead investor or as one of the players in eight startup companies.

There is a method in the madness of Prosus’s strategy. It has concentrated on three key areas in India — edtech, food tech and, of course, fintech. It has also forayed into the healthcare space by investing in PharmEasy. 

Prosus could see a huge upside in this space given that PharmEasy recently acquired diagnostic firm Thyrocare, which is a listed entity. PharmEasy is also planning to go for an IPO and analysts say it’s looking at a valuation of $9 billion. It raised a fresh round of funds of $500 million in July, which included Prosus and got a valuation of $4 billion. 

In the edtech space Prosus has been active globally, funding firms like India’s Byju’s or Poland’s Brainly. It has also been investing in the area of upskilling of executives by betting on companies like Skillsoft in the US and GoodHabitz in Europe. In India it has invested in Eruditus, which is into executive education.

In the fintech space the acquisition of BillDesk represents a clear consolidation of the business in the country.