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Africa’s biggest firm sees education as new growth market

Naspers

 

Naspers Ltd plans to expand in education software as Africa’s biggest company by market value searches for a repeat of the profitable bet it made on Tencent Holdings Ltd of China.

The owner of Africa’s biggest pay-TV service is seeking to build on investments in US education-technology companies Udemy and Brainly that it made earlier this year, adding a new limb to a growth strategy that has taken the Cape Town-based company into Indian online retail and Russian social networks.

“We believe that, just as technology has transformed the way people communicate, 10 years from now education will be fundamentally transformed,” Chief Executive Bob Van Dijk said in a phone interview on Friday. “People spend a tremendous amount of money and time on education.”

New investments

Naspers has been scouring the world for a repeat of the investment that made its name: the purchase of a $32 million stake in WeChat creator Tencent in 2001, which is now worth about $78 billion. That helped transform the business from a South African newspaper publisher into global investor in technology companies, and Tencent’s contribution helped Naspers increase earnings by 31 per cent in the six months through September, the company said earlier on Friday.

The e-commerce division also showed signs of strength, with 23 businesses making a profit compared with 18 a year earlier. That helped offset a decline at the TV unit, which was hurt by weaker sub-Saharan African currencies against the dollar while subscribers switched to cheaper competitors.

The shares rose 1.1 per cent to 2,087.59 rand at the close in Johannesburg on Friday, valuing the company at 916 billion rand ($64.6 billion). Naspers will consider disposing of businesses alongside any purchases in education and other industries, Van Dijk said, citing the sale of Polish online auction site Allegro to private equity firms for $3.25 billion last month.

The company has also agreed to combine Indian travel operation Ibibo with US competitor MakeMyTrip Ltd, while Amazon.com Inc is in talks to acquire Dubai-based online retailer Souq.com FZ, in which Naspers owns a stake, according to people familiar with the matter.

“We are critical of our portfolio and we want the right assets on board,” the CEO said. “You can expect us to keep looking at our assets that may well lead to further action.”

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