Just a few months ago, Prosus, one of the world’s leading technology investors, faced a significant setback in India. The company wrote off its entire $500 million investment in Byju’s, the edtech giant it had backed six years prior when the company’s valuation stood at $22 billion. Governance concerns prompted Prosus’ representative to step down from Byju’s board last year, marking a low point for the investor.
However, failures are part of the startup ecosystem, and Prosus has quickly bounced back. Its major win with Swiggy demonstrates resilience. On November 13, the Netherlands-based investor reaped over $500 million by selling one-fifth of its 31% stake in Swiggy during the food delivery platform’s IPO. Its remaining 25% stake in Swiggy is now valued at over $2.5 billion, given the platform’s current market capitalization of $11 billion.
This windfall has renewed confidence at Prosus, even amid earlier setbacks. “Our investment of $1.3 billion in Swiggy will return more than all the capital we’ve deployed in India,” said Ashutosh Sharma, Head of Growth Investments for India and Asia at Prosus. To date, the company has invested $8.2 billion across 24 Indian startups and is actively preparing for its next round of bets. Sharma revealed that Prosus has extended term sheets exceeding $100 million to a marketplace startup and a fintech company, signaling its intent to stay aggressive in the Indian market.
A Shift in Strategy
Prosus, the Dutch-listed arm of South African technology giant Naspers, has refined its investment strategy over the years. Initially focusing on foodtech, payments, and marketplaces, it now prioritizes sectors with transformative potential, such as generative AI, enterprise SaaS, and the rapidly growing digital economy in tier-II and tier-III cities.
One of its latest moves underscores this shift. In October 2024, Prosus acquired a 10.65% stake in Mintifi, an Indian supply chain financing startup, for approximately $80 million. This investment, disclosed in its half-yearly financial filing on December 2, values the Mumbai-based company at around $755 million. Founded in 2017, Mintifi digitizes supply chains for clients like Tata Motors, Jockey, and Parle Agro, enabling distributors to procure inventory with deferred payment options. In FY23, Mintifi reported a net income of ₹156.9 crore and a net profit of ₹24.8 crore. Estimates for FY24 suggest significant growth, with net income projected at ₹330.8 crore and profits at ₹97.8 crore, excluding ESOP costs.
Mintifi is not Prosus’ only recent foray into Indian startups. It has also invested $100 million in housing finance company Vastu Finance, acquiring an 8.4% stake, and participated in a ₹900-crore funding round for Bluestone, a jewelry retailer.
The Prosus Advantage
Unlike traditional venture capital funds, Prosus operates from its own balance sheet, allowing it to take a long-term approach to investments. This patient capital strategy has been instrumental in nurturing unicorns like Swiggy, Meesho, and Urban Company. Its global network also offers portfolio companies access to valuable insights and resources, fostering innovation and scalability.
Despite its successes, not all bets have been profitable. Beyond Byju’s, Prosus has faced challenges with companies like ZestMoney, Good Glamm, and Fashinza. “The lesson from Byju’s was the potential pitfalls of debt-fueled growth for loss-making startups,” Sharma remarked.
What’s Next for Prosus?
Prosus’ future strategy aligns with India’s evolving digital and economic landscape. Sharma has highlighted three key areas of focus:
Serving the next 300 million mobile users.
Leveraging generative AI for innovative business models.
Scaling enterprise SaaS startups to cater to global markets.
By targeting tier-II and tier-III cities, Prosus aims to tap into aspirational middle-income consumers. “Middle India represents aspirational consumers. We see new business models emerging to serve their needs, which could define the next decade of growth,” Sharma stated.
With $240 million already invested in 2024, Prosus continues to lead in reshaping India’s startup ecosystem. Its ability to identify and back transformative companies like Swiggy, Mintifi, and Vastu Finance positions it as a key player in driving the next wave of innovation and economic growth.
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