The top 25: Larry Illg, CEO of food and ventures, Prosus Ventures (formerly Naspers Ventures)
Larry Illg oversees Prosus Ventures, the corporate venture capital (CVC) arm of Prosus, a Netherlands-listed consumer internet company that was spun out of South Africa-based Naspers in 2018.
Bob van Dijk, group chief executive of Prosus and Naspers, said: “2019 was a transformative year for the group, which included listing Prosus on Euronext Amsterdam and accelerating growth in our ecommerce portfolio, while continuing to target future growth through Prosus Ventures.
“As CEO for Prosus Ventures and our food delivery segment, Larry has played a key role in improving the daily lives of millions of people in high-growth markets across the world. Food delivery was a significant investment area, focused on driving order and revenue growth, establishing Prosus as a leading global investor in the sector.
“Through the Ventures team, Larry has ensured our investments in emerging sectors including logistics and blockchain, and existing sectors such as education, can pave the way for the group’s future growth.”
Naspers’ approach to investing in developed markets changed in late 2015 from avoidance – after some middling deals in western markets in the 1990s – to active investments in the US.
One of its first deals was a $100m series A round in Letgo, a US-based mobile classified advertising application, in September 2015, following up with a $175m in January 2017 then again with a $500m in August in 2018.
Naspers CEO Bob van Dijk said at the time: “We will probably have more focus on the San Francisco Bay area than we have had previously. If we see the right opportunities, we could see ourselves put a good amount of capital there.”
This led to the opening of Naspers Ventures in San Francisco in May 2016 under Larry Illg, a former eBay online auction company executive. Illg joined Naspers in 2013 from real estate listings platform Trulia, where he was general manager of new ventures. He was chief operating officer of Naspers’ e-commerce assets before taking the reins at Naspers Ventures.
Naspers Ventures is where the majority, 36 deals worth an aggregate $2.5bn in round totals, of the investing has happened but not all. Charles Searle, who is responsible for managing Naspers’ listed assets, including Tencent and Mail.ru, and van Dijk had an active year, too.
In March 2018, Naspers sold HK$76.95bn ($9.8bn) of shares in Tencent, the China-based internet group in which it invested $32m in 2001.
Tencent operates a large-scale online services offering centred on its messaging app, WeChat, which has more than one billion users. At the time of the agreed sale, it was the fifth most valuable company in the world, and it had a market capitalisation of about $505bn.
Naspers acquired a 46.5% share of Tencent through its $32m investment, which took place three years before its initial public offering in Hong Kong, and as of March 2019, Naspers holds 31% of Tencent.
The company sold 190 million shares, equating to a 2% stake in Tencent, at HK$405 each. Naspers pledged in a statement not to sell any more shares for a further three years.
The proceeds from the sale will be used to shore up Naspers’ balance sheet and fund an investment drive intended to boost its holdings in other sectors. Naspers Ventures invested in five main sectors in 2018, food, education, health, mobility, mobile – with Illg focusing on food.
Outside the US, Naspers Ventures expanded by opening offices in Singapore and India. This year’s top GCV Rising Star Ashutosh Sharma was recruited in October 2016 from venture capital firm Norwest Venture Partners to head the India office and to lead Naspers’ VC and M&A deals there. Sharma was a vice-president for Norwest in India, having previously been an investment manager at Qualcomm Ventures, the corporate venturing arm of mobile chipmaker Qualcomm, between 2010 and 2012.
Although none of its other investments have garnered the same return as Tencent, in 2007, Naspers invested in Mail.ru, the Russia-based internet company with about $1.85 billion of revenue in 2018 and its earnings before interest, taxes, depreciation and amortisation reached $320 million. Mail.ru was exited through a $740m M&A by Russia-based telecoms operator Megafon in early 2017.
Naspers had also been backing since 2012 the India-based e-commerce firm Flipkart and invested about $616m. Its US peer Walmart acquired Flipkart’s 77% stake worth $16bn in mid-2018, and Naspers made about $3.3bn in the sale.
Another notable exit was Philippines-based blockchain technology developer Coins.ph, with ride-hailing service provider Go-Jek acquiring a majority stake for an undisclosed amount. Naspers Ventures had initially led a $5m second tranche of the $10m series A round in 2017.
Another GCV Rising Star Russell Dreisenstock, who ranked first in 2019, had been instrumental in conducting the $71m investment in Flipkart. For his profile, he cited the low valuation at Naspers first entry and the “exceptional” returns it produced.
And Dreisenstock had had good reason to be pleased with its success. “When looking at technology hotspots outside the US, it is difficult to see past India. Home to 1.3 billion people and the world’s seventh-largest economy, India is also the birthplace of an outsize influence in Silicon Valley, due to a large diaspora of talent spread across both startups and established technology companies – look no further than the top executives of two of the world’s top five most valuable companies, Satya Nadella at Microsoft and Sundar Pichai at Google,” wrote Dreisenstock in an article for Entrepreneur.com in September 2017.
In his Entrepreneur article, Dreisenstock cites the characteristics present in Indian culture that have a positive influence on the country’s startups. They are bargaining and negotiating, respect for experience, community and jugaad – an Indian concept that he defines as “the most innovative, economical and quality method to accomplish the desired task by unusual or imaginative means and ways”.
It is no surprise then that Naspers Ventures has been particularly focused on India. It supplied $250m in 2016 for Ibibo Group, which owns and operates bus ticketing platform redBus.in and hotel booking site Goibibo.com, and participating in five financing rounds for online food ordering platform Swiggy, having provided most recently $80m for its $210m series G round and $660m for a $1bn series H round in June and December 2018, respectively.
However, India is by no means the only part of the world Naspers is interested in. Food delivery platforms around the globe appear to be one of the areas beyond media and e-commerce that firm is keen to move into, having invested about $2bn in such companies in 2018, overseen by Illg.