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Home / SmartTech / Inside Prosus Ventures Spends $ 4.5 Billion on India – TechCrunch

Inside Prosus Ventures Spends $ 4.5 Billion on India – TechCrunch



Prosus Ventures filed a hostile bid for British startup Just Eat last week to prevent a unanimous rejection of its board while fending off rival Takeaway.

The Giant Naspers ] Spinoff said it was ready to pay up to $ 6.3 billion in cash to lure Just Eat, one of Europe's largest Foodtech players.

Prosus' big bet on online food startups should not be surprising; The recently listed subsidiary, whose parent company has invested in companies in more than 90 countries, has a strong appetite for start-ups in the food supply industry worldwide.

How strongly Prosus believes in food technology may be reflected in emerging markets such as India. One of the busiest nations of the investment firm, where the economy of unity for almost every Internet startup has not worked, and probably not for a few more years.

Prosus Ventures invests globally in startups supplying food

Last year, South African company Naspers announced a $ 1 billion financing round for Indian startup Swiggy. The investment firm contributed $ 716 million, just short of the $ 750 million raised by Swiggy's main competitor, Zomato, in the eleven years of its existence.

TechCrunch spoke to Larry Illg, CEO of Prosus Ventures and Food and Ashutosh Sharma, Head of Investments for India at the Venture Company, to understand how important Foodtech is to the investment firm and the bets they make in India is complete.

Swiggy

"We had a thesis about the delivery of food globally," Illg described the company's first search for a food supplier in India. "We knew there would be at least one big player in India in the future. We went through the city and talked to many startups. "

And then they found Swiggy. But, Illg said, it was a very different swiggy than the one currently dominating the Indian market. "So here was a startup for food delivery that was already profitable. The only challenge was that it was operational in only six cities in India.

And so Naspers' journey began to persuade Swiggy to expand its service nationwide. Swiggy today competes in more than 130 cities across the country with Zomato, UberEats and Ola's own FoodPanda (now known as Ola Foods).

Prosus Ventures – Sharma, who runs the India business, warned it is early for food startups in India. "I want to say we're on the first day, but it could just as well be day zero. The number of smartphone users in India ordering food online is still below 2%. "

But even this emerging category has attracted some tough competitors. While UberEats and Ola's Foods are struggling to make a significant impact, Swiggy and Ant Financial-Backed Zomato are in an intense battle.

Both companies are losing more than $ 20 million each month, according to industry reports. Zomato burned about $ 45 million a month a year ago, according to Info Edge, a listed investor in the startup, in its recent earnings call to analysts.

Illg is not really worried about the raging cash burn in India food delivery market, and Prosus also has no shortage of cash.

This cash could be useful very soon. A source at Zomato told TechCrunch that it plans to raise up to $ 550 million in a round led by Ant Financial.

TechCrunch reported earlier this year that Zomato quietly sets up its own supply chain to control the raw material its restaurant partners use. Two sources familiar with Zomato say the startup wants to expand beyond the delivery of food for the delivery of food.

Earlier this year, Swiggy announced that its delivery fleet is now able to move just about anything from one part of the city to another. The service called Swiggy Go is currently restricted to selected cities. According to sources Zomato plans to repeat this. None of these developments has been previously reported.

In addition, cloud kitchens are the current focus of Swiggy. This week, the company announced that it has set up more than 1,000 cloud kitchens in the country than any of its competitors.

Illg said cloud kitchens are critical to a country like India, which has a low restaurant density. "We have the visibility of overall market momentum," he said. "We can look at a place, search the data and know what kind of restaurants and food would work there."


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