Dutch investor Prosus to raise bets on India

MUMBAI: Dutch technology investor Prosus, which has invested over $8 billion in the country, will raise its bets on India, where more people are coming online, expanding opportunities for companies and investment firms alike and giving new startups room to find their feet.

India is very "heterogeneous" - people from different parts of the country vary in the way they buy and transact, allowing multiple firms to have a play in the same sectors, Ashutosh Sharma, head of growth investments (India and Asia) at Prosus, said. He cited the instance of its portfolio firm Meesho, which tapped a different market within e-commerce and built its play despite the presence of giants Amazon and Flipkart within the sector.

"The India next" - the next set of 100-200 million users who are coming online - opportunity is something the firm is looking at besides scouting for more deals in the GenAI space. "What is Meesho-equivalent in other sectors and can we invest in that early is what we will explore. When we started investing in India, it was largely consumer tech... over time, we added B2B marketplaces, SaaS, crypto and now GenAI. Our excitement around India continues and you will see us be more aggressive than we have been in the past across sectors here," Sharma told TOI in an interview.

Prosus counts Swiggy, PharmEasy and Urban Company among its portfolio companies. The firm - which is Swiggy's largest shareholder with over 20% stake - made over $2 billion in gains on its total investment in the startup which got listed on the bourses last month in India's second-biggest public issue of the year.

Sharma said that there are quite a few other startups in its portfolio which are "ready" to get listed without sharing timelines. Even as a mix of geopolitical tensions and the election win of Donald Trump risk pose market uncertainties, strong backing from domestic investors and high appetite for new-age tech stocks should bode well for startups planning IPOs in 2025, Sharma said.

"As a country, we are still in the very early stages of tech penetration across sectors. Investors believe that there is a long runway for all of these companies to perform. These are all, in that sense, growth stocks and not defensive stocks and there are a set of investors which are excited in them," Sharma said. He added that unless a black swan or a big disruptive event takes place, foreign investors - who have been net sellers in the past couple of months - should come back to India sometime next year.

Prosus's investment cheques for India will range across early stage, mid-sized and late stage companies. "The overhang of rich valuation (in private markets) that was seen in 2021 and early 2022 is gone now. The India story looks pretty solid, valuations look palatable and companies are on a much stronger footing", making Prosus bullish, more so on late-stage bets going forward.

The investor's failed bet in Byju's - which has gone from being a $22 billion startup to facing bankruptcy - has not deterred it from evaluating deals in the edtech space as technology is the only way to bridge the demand-supply gap of quality education in India, Sharma said.

Globally, Prosus's most successful bet has been China's Tencent and the firm aims to emulate the same in India. "It's an aspiration for sure. That's like a once-in-a-lifetime kind of a hit," he added.