Naspers (Bloomberg)
Naspers (Bloomberg)

India's fintech segment continues to be key market: Naspers CEO

  • Naspers which has a global market capitalization of $105 billion already has made big investments in India’s technology startups

BENGALURU: South Africa’s internet and media giant Naspers will continue to double down on investment in India’s tech startup ecosystem, with a renewed focus on new-age credit products and backing entrepreneurs with original ideas as opposed to emulated business models.

Speaking at the ongoing World Economic Forum (WEF) in Davos, Bob van Dijk, group CEO of Naspers said that India has been a key market for technology investments in recent years.

“...It always surpasses all our views (about the state of the market). Also, the quality of entrepreneurship and education is very high. In the early days, we saw great business models from abroad being executed in India. But India is now innovating, and it has now started exporting new concepts and business model abroad," Djik said during a panel discussion on India’s economy.

Even with slumped economic growth and crisis deepening in India’s financial sector, Djik believes that there is still room to explore in terms of backing new ideas. “Bringing funding and credit opportunities to more Indians has been a fresh focus for us. Our portfolio PayU has introduced short term credit for new kinds of customers and we will invest in new models of financing and credit access that private banks may not necessarily provide," he added.

In January this year, Naspers-backed digital payments platform PayU purchased a controlling stake in consumer lending platform PaySense at a valuation of $185 million. PayU also merged PaySense with its existing credit product LazyPay.

India has seen an emergence of new-age credit products designed to attract consumers and businesses that do not possess a credit score or a previous history of credit purchases. Private Indian banks depend heavily on credit scores supplied by credit bureaus to underwrite loan applications, but tech startups are coming out with newer ways to underwrite consumers.

PayU’s credit product LazyPay provides users with a pre-approved credit line starting at 5,000 and above. Users can make their online purchases using the credit line, and settle bills on a monthly basis with LazyPay. This model is based on the “buy now and pay later" strategy help made possible due to the availability of personal consumer data.

Using consumer data such as bank statements, smartphone data, and even social media data, emerging digital lenders such as LazyPay, are able to create an alternate credit score to underwrite their borrowers.

Apart from online lending, Djik drew attention to the growing number of Indian entrepreneurs who are now working to solve local problems rather than importing or emulating ideas from foreign countries. Naspers recently invested in Pune-based logistics startup ElasticRun which leverages the network of Kirana stores to handle last-mile deliveries. Kirana store owners who may have idle time can use ElasticRun to pick and drop goods to other Kirana store owners and deliver to customers as well.

Naspers which has a global market capitalization of $105 billion already has made big investments in India’s technology startups including in names like BYJU’s, Swiggy, and Flipkart. The South African firm made a $1.6 billion dollar exit from its stake in Flipkart when the e-commerce major sold to Walmart in 2018. It also recently exited its stake in online travel aggregator MakeMyTrip through a share-swap deal with China’s Ctrip.

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