Naspers sets up VC arm in India

Naspers, the South African internet and media group better known for its investments in OLX, PayU and ibibo has set up a venture capital arm in India as it looks to expand its investment base in the country.

The firm has hired Ashutosh Sharma, who was with the India team of Silicon Valley-based venture capital firm Norwest till now, to lead investments and merger and acquisitions in the country.

Naspers Ventures, which has a significant presence in the US and Singapore has set up an Indian office in Bangalore and has already started scouting for deals in the market. Currently, the firm is focusing on early to mid-stage transactions ranging from $10 million to $50 million for a minority stake.

The firm will be targeting technology-focused startups in areas like healthcare, education, and logistics, besides consumer internet and online retail plays. Speaking to Economic Times, Ashutosh Sharma said that their strategy will be to back scalable technology startups.

“From a valuation standpoint, this is a good vintage to invest in as they have rationalized. Valuations are not a big concern, but how many consumer scale categories are left to be attacked in India and how quickly we can identify who we want to work with in those categories is the main priority,” said Sharma, a Chicago Booth School management graduate.

It’s important to note that Naspers decision to expand its Indian investments comes at a time when its peers look withdrawn. Both Japan's SoftBank and New York-based investment firm Tiger Global Management, who have invested about $2 billion each in India have slowed down over the past 12 months.

In 2016, Naspers made two of the largest consolidation plays in India aimed at strengthening its India portfolio towards market leadership. Its payment gateway PayU acquired Citrus Pay for $130 million while its travel portal ibibo was acquired by MakeMyTrip in a stock deal worth around $1.8 billion.