Prosus chief executive Bob van Dijk. Photo: File
Prosus chief executive Bob van Dijk. Photo: File

Prosus is investing R3.85bn in Norwegian online grocery business

By Sandile Mchunu Time of article published Apr 9, 2021

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DURBAN - PROSUS yesterday made its first direct investment in an online grocer by investing €223 million (R3.85 billion) in a Norwegian e-grocery business.

Oda, which has rebranded from Kolonial.no is Norway’s largest online grocery business, which provides thousands of people with same and nextday home deliveries of high-quality groceries, meal-kits, and household items, said it had raised €223m in a funding round led by Prosus and SoftBank Vision Fund 2.

The online grocery business market is expected to reach $1.1 trillion by 2027.

Prosus said as part of the transaction, Neil Cunha-Gomes, an investor at SoftBank Investment Advisers, and Roger Rabalais, a chief financial officer of Food Delivery at Prosus would join Oda’s board.

Chief executive of Prosus Food Larry Illg said online grocery represented a large growth opportunity compared to traditional e-commerce and it was still in its very early days.

“Our expertise from operating and investing in e-commerce and food delivery companies for more than a decade, many of which now have promising grocery delivery businesses, positions us well to capitalise on the opportunity in online grocery,” Illg said.

Prosus, which is led by chief executive Bob van Dijk, brings a lot of expertise around food delivery to the online grocery space after it entered the food delivery market in 2013 and now had leading food market places in its portfolio.

Prosus’s food delivery businesses, which include Delivery Hero, iFood and Swiggy, are the market leaders in 46 markets, and each portfolio company has made significant investments in grocery and convenience delivery in the past year.

Illg said they had seen a significant inflection point with grocery in the last year, with the market transitioning online, accelerated by Covid-19 outbreak.

“Oda’s leadership and impressive growth in Norway paired with its groundbreaking technology and ambition to scale across Europe and beyond makes them an ideal partner to tackle the grocery opportunity in the coming years,” he said.

Karl Munthe-Kaas, the chief executive and co-founder of Oda, said they believed they had cracked the e-grocery logistics code to become the most affordable, the freshest and the greenest e-grocer in the world.

“We are thrilled to finally share the news of our funding and international expansion. This comes at a time when demand for our services, not just within our native Norway, but also internationally, is incredibly strong. Our proprietary technology and automation, creates an extremely effective value chain from farm to fork, allowing us to compete profitably with discounters on price. This puts us in a unique position to win the global e-grocery race. We look forward to bringing our service to customers in Finland later this year, and Germany in 2022,” Munthe-Kaas said.

Prosus also acquired approximately 20.37 million shares in Delivery Hero to take its stake to 24.99 percent in the food delivery business at the end of March, becoming the largest shareholder in Delivery Hero.

The group said it had no intention to acquire further shares in Delivery Hero for the next 12 months.

Earlier this week Prosus Ventures co-led a $350m investment in Indian HealthTech company API Holdings, which owns India’s largest integrated digital healthcare platforms.

Prosus’s share price leapt by more than 2 percent on the JSE yesterday morning after the global consumer internet group completed the sale of Tencent shares, which reduced its stake to 28.9 percent from 30.9 percent in the Chinese internet group.

The sale was conducted by way of an accelerated offering at a price of HK$595 (R1 111) a share and raised $14.6bn in proceeds, which will be used to increase its financial flexibility for investing in growth plus general corporate purposes.

Prosus chairperson Koos Bekker said in their view Tencent was one of the world’s best growth enterprises and it has consistently delivered value since its listing in 2004.

“Our belief in Tencent and its management team is steadfast, but we also need to fund continued growth in our core business lines and emerging sectors plus create some headroom for acquisitions,” Bekker said.

He added that they informed Tencent of their intention, which was understood and supported by the internet giant.

“We commit that we will not sell further Tencent shares for at least the next three years, in line with our longterm belief in the business,” he said.

Prosus share price rose to a dayhigh of R1 660.25 a share after falling by more than 4 percent a day earlier when the sale was announced.

Prosus’s share price yesterday closed 1.09 percent up at R1 640.03.

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