Rising Stars Q&A – Banafsheh Fathieh, Prosus Ventures

Martin Tschopp, chief executive of Prosus Ventures (formerly Naspers Ventures), the corporate venturing vehicle for the Netherlands-based Prosus, a global consumer internet group and one of the largest technology investors in the world, said of Banafsheh “B” Fathieh, head of Americas investments for the unit: “One of our top investment criteria is that we align well with the founding teams of potential investments and we typically spend substantial time with the team before issuing a term sheet.

“This year has introduced significant challenges, preventing us from traveling around the globe to spend that quality in-person time with the teams of potential investments. Despite these challenges, Banafsheh has continued to build a strong portfolio of companies, finding new ways to connect with the founding teams to ensure we are maintaining high standards when it comes to adding new businesses to the Prosus Ventures portfolio.

“Banafsheh’s knowledge of startups in emerging markets is impressive and her knack for identifying early-stage, innovative technologies that are addressing big societal needs give the Prosus Ventures team a unique advantage.”

1. First, just give us a quick overview of who you work for, what you do, and how long you have been doing it for? 

I am a proud member of the Prosus Ventures team. I lead many of our earlier stage deals globally as an Investment Lead and have been doing so for about four years. My role in the organisation is to scout new markets and verticals for the group, with the intention of being the first or second cheque into a high-growth market or category where we could see ourselves getting meaningfully involved in the next five to 10 years. My role spans category identification, thesis creation, deal sourcing, execution and post-transaction work (as board member).

Now a little bit about our organisation: Prosus is a global consumer internet group and one of the largest technology investors in the world. Prosus builds leading consumer internet companies that empower people and enrich communities by operating and investing globally in markets with long-term growth potential. The group is focused on building meaningful businesses in the online classifieds, payments and fintech, and food delivery sectors in markets including India, Russia and Brazil. Through its ventures team investments, in areas including edtech and health, Prosus actively seeks new opportunities to partner with exceptional entrepreneurs who are using technology to address big societal needs. Every day, millions of people use the products and services of companies that Prosus has invested in, acquired or built, including Avito, Brainly, Byju’s, Codecademy, ElasticRun, eMag, Eruditus, Honor, iFood, LazyPay, Letgo, Meesho, Movile, OLX, PayU, Red Dot Payments, Remitly, SimilarWeb, Shipper, SoloLearn, Swiggy and Udemy. Similarly, hundreds of millions of people have made the platforms of its associates a part of their daily lives: Tencent, Mail.ru, Ctrip.com and DeliveryHero. Today, Prosus companies and associates help improve the lives of around a fifth of the world’s population. Prosus has a primary listing on Euronext Amsterdam and a secondary listing on the Johannesburg Stock Exchange, and is majority owned by Naspers.

2. What attracted you to CVC? 

I really liked the idea of investing without the constraints of a traditional fund life. There are many categories that require patience to meaningfully transform and, as a result, need a different vantage point than traditional venture capital. Since we invest off of our balance sheet, we have the ability and luxury to be extremely patient and partner with entrepreneurs in solving some of the world’s toughest problems. Themes like “access to better education,” “healthcare” and “financial inclusion” are rarely meaningfully solved in seven to 10 years (the length of a traditional venture fund). I like that we have the ability to participate at an early stage and support companies for multiple decades if that is what it takes! To me, that is pretty exciting work.

3. What have been your greatest successes at your unit? 

I have had the opportunity to open up several new markets and themes for the group; namely:

(1) Elder care: led category identification, thesis and sourcing on elderly care which led to our eventual $35m investment in Honor’s $50m series C round; our first cheque into eldercare as Prosus Ventures.

(2) Blockchain: led thesis, sourcing, deal execution and board oversight on our seed and series A investments in DappRadar, a Lithuanian decentralised application analytics and discovery platform, and Immutable, a blockchain gaming and NFT marketplace company.

(3) Mexican Fintech: led thesis, sourcing, deal execution and board oversight on our series A investment in Klar, a Mexican digital banking company for Mexico’s masses; our first cheque into Mexico and fintech as Prosus Ventures.

(4) Indonesian Logistics / South East Asia: led thesis, sourcing, deal execution and board oversight on our series A investment in Shipper, an Indonesian logistics company, our first cheque into Indonesia and logistics as Prosus Ventures.

And more forthcoming but not yet publicly disclosed in areas like education and fintech in emerging markets.

4. What have been your biggest challenges? 

Our mandate is extremely broad by design – we are one of the only players in the world that is truly stage, vertical and geographically agnostic. The biggest challenge is deciding where, when and how much to invest. Unlike many of our peers, we do not have many strategic or investment constraints and have the freedom to explore any theme in pretty much any geography at any stage. This sort of freedom comes with its own set of unique challenges – I would say the primary one for me is deciding where best to direct and allocate my team’s focused time and attention.

5. What is your main professional ambition for the future?

To be CEO of course! Jokes aside – I care about meaningfully solving global problems like financial inclusion and access to education and healthcare (through capital invested behind amazing teams or in an operating capacity – whichever I see as leading to greater impact in pushing the ball forward on these issues). I am mostly motivated by mission and less so by ambition – for me, impact and personal growth matter most. I tend to follow that criteria and see where it leads me – so far, some great adventures and amazing people met!

6. What do you think all CVCs could do better to make it a stronger industry?

Swing for the fences and increase their appetite for risk. Many corporates have a tendency to underestimate new technologies and new entrants. I say, succumb to imagination! I would encourage every CVC to have a budget set aside for total moonshot bets – those could be the very ones that eventually upend and disrupt their core business. Fight corporate inertia as if their life depended on it (because, eventually, it does).

7. What are some of your corporate parent’s technology needs and corporate strategy amid the pandemic, as well as your CVC unit’s pain points?

We have been lucky in that we have had a very resilient overall portfolio amid the pandemic. Our portfolio has large exposure to sectors like education technology, food delivery, e-commerce, etc. which have held up well during this most black swan of events. Our biggest pain point has been the grounding of travel – it has been challenging not to meet founders face to face, especially given our very long investment horizon. Our partnerships are often multi-decade in nature and we spend a lot of time getting to know our founders prior to investing. We have had to make some ad hoc changes to our investment process but, while we are making due, our solution is not an ideal one in the longer term.

8. And, finally, for colour, what did you do prior to CVC or in your spare time?

Prior to Prosus, I was part of the founding team and a vice-president of OCV Partners, a $300m technology venture growth fund. Prior to joining OCV, I was an operator at OTOY, a cloud graphics technology startup backed by Yuri Milner’s DST Global and Autodesk, where I was responsible for strategy, financings and corporate development. Throughout my career, I have served in various operating, investment management, investment banking and advisory roles primarily around startups and venture capital. I graduated from Georgetown’s School of Foreign Service with a degree in International Economics.

In terms of fun, I am an avid yogi, vegan, environmental advocate and fitness enthusiast. In my spare time, I tend to lead the life of someone in their golden years – I read, meditate, cook and garden!