How this South African billionaire is milking a cash cow

May 21, 2015 15:21
In 2001, Koos Bekker put a US$32 million bet on Tencent, then an obscure internet company. Today, his investment is worth US$66 billion. Photo: Bloomberg

Fifteen years of milking an internet cash cow called Tencent have taught South African billionaire Koos Bekker a thing or two about where to find a hardy stock. 

All it took was one smart move and a stroke of luck.

Now he is trying to do it again.

In 2001 Naspers Ltd., the media group he chairs, put US$32 million into Tencent, then an obscure internet company.

Today the investment is worth US$66 billion -- roughly equal to Naspers’ entire stock market capitalization, according to Bloomberg.

To prove he is capable of more successes, Bekker is scouring the globe in search of new tech deals.

“What we’ve done over the years is take huge risks,” Bekker said.

The task now is “to find the countries where the gaps still exist because in many countries the good opportunities have been taken”.

Bekker, 62, is seeking to prove Naspers is more than a giant venture-capital fund built on a single grand-slam investment.

The markets give little to no value to the company’s other businesses, including Africa’s largest pay-TV network and investments in dozens of other start-ups.

A year ago, Bekker stepped down from running Naspers for a year-long “sabbatical” that took him to Shanghai, Seoul, San Francisco and elsewhere in search of new ideas.

He says the time away convinced him the firm needs to double down on e-commerce in developing countries -- even though there’s a lot more money chasing emerging-market Internet deals today, and brutal competition both from locals and US giants like Inc.

Naspers is almost unrecognizable from the company Bekker took over as chief executive officer in 1997.

At the time, it was called Die Nasionale Pers, or The National Press, and was principally known as the publisher of Die Burger, an Afrikaans-language daily that was a staunch defender of apartheid.

Although the editorial line has changed, Naspers still publishes the paper.

Bekker serves as chairman and has given the chief executiev job to former EBay Inc. executive Bob Van Dijk.

Using cash from the pay-TV division, which was founded in the 1980s, Bekker started plowing funds into more than 100 technology businesses around the world.

Most of those bets bled money: Online retailers in Africa had to be shut down and the company took an US$80 million loss on a Chinese internet service provider.

When Naspers bought half of Tencent in 2001 (since diluted to 34 percent), the Chinese company was a fledgling player in a country with minimal internet use.

Today more than a billion people use Tencent’s messaging services such as WeChat.

On May 13 the firm reported record profits from its vast range of online businesses.

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