CAPE TOWN - Naspers last month completed its accelerated offering of Tencent shares, reducing its stake in Tencent by 2percent from 33.2percent to 31.2percent and the sale yielded $9.8billion (R116.25bn).
That is equivalent to about 5.6percent of Naspers’s stake in the Chinese platform company with its fingers in every pie from e-commerce to artificial intelligence.
Naspers moved into broadcasting in the 1980s with the establishment of what is today the MultiChoice platform, before becoming a successful tech investor, with stakes in the likes of India’s Flipkart,
Germany’s Delivery Hero and Russia’s Mail.ru.
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But it was only after Naspers bought a $32million stake in Tencent that it realised some serious growth, leading to Naspers being valued at about $125.5bn today. Naspers’s stake in Tencent is worth about $175bn, meaning its value leans heavily on its Tencent stake.
Naspers then promised not to sell any more of its Tencent shares, at least for the next three years and for good reason.
Have you heard about the businessman Richard Li Tzar-kai who missed the big boat?
Before Tencent was listed, Li, the second son of tycoon Li Ka-shing, took a 20percent stake in 1999 for $2.2m. He sold out to Naspers after a year for $12.6m - a six-fold return.
That was not a bad investment at all, in fact, that was a pretty good return. However, Naspers turned out to be the bigger winners, with those shares now worth about $73bn.
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Richest five
If Li had held on to those shares he may be now among the world’s top five richest people, according to Asia Times. Tencent, founded in November 1998, was unprofitable for the first three years of its existence and its income was originally derived solely from advertising and premium users of its messenger product QQ.
Being a multi-sided platform, the company had various options to explore, as long as it had investor backing, and boy, was the patience worth it!
Tencent found its sweet spot in online gaming, among other services, and today investors such as Naspers are smiling all the way to the bank.
That is the nature of platform companies.
Jacob Morgan, speaker, futurist and author of The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization explains: “A platform company partners and incorporates technology from multiple corporations, partners, nonprofits, and educational institutions to drive business performance and build ecosystems.
“While this concept is not new, it is growing and evolving. Instead of only concentrating on what is going on inside a company, the focus is shifted to building networks outside of the organisation. These networks assist in building a stronger, more profitable platform company.”
It is on this premise that integrated African technology platform company, Sagarmatha Technologies, was founded.
The company aspires to become the African leader in e-commerce, digital media and syndicated content and technology ventures as part of the 4th Industrial Revolution (4IR).
It owns 95percent of African News Agency (ANA) - a content syndication and news wire agency; 83.3percent of Loot Online - a general merchandise online retailer; 60percent of IOL Property JV - an online classifieds business specialising in property; 100percent of Independent Online, an online news business; and 100percent of Sagarmatha Enterprise Solutions targeting global innovation and growth areas of ICT and acquiring or partnering with experts in the space.
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This looks to be a really good mix and enough to start up a multi-sided platform company. Sagarmatha Technologies plans to become the first African unicorn company to list on the JSE next Friday, a move that has drawn significant attention since it was announced.
The African technology platform group, which committed R100m to train 5000 computer programmers in Africa over the next five years, said in a pre-listing statement that it planned to raise R7.5bn in a share placement of 189.3million shares at R39.62 a share.
A feat never achieved by an African unicorn. Could there be an international listing in the pipeline? Domestic and international investors are watching and so are we.