The Netherlands-headquartered Prosus’ India thesis is paying off in quick succession, and the global consumer-internet investor is now gearing up to deploy more patient capital across consumer internet, artificial intelligence (AI) and fintech, senior executives told Mint. The clearest proof point is Meesho—where Prosus is among the largest institutional backers—as the company’s strong market debut at an over 53% premium has sharply boosted the value of its investment and strengthened its confidence in India as a long-term growth market.
On Wednesday, Meesho’s share price ended the listing day at ₹170.45 on the National Stock Exchange, a 53.6% premium to the initial public offering (IPO) price of ₹111. The company shed over 1% gains on Thursday, with its market capitalization at ₹ 75,942 crore, or $8 billion.
With an 11.2% stake in the mass market online retailer, Prosus has struck gold. The firm that enjoys the reputation of having evergreen capital is in no hurry to sell.
It had all started with a cold email to the founders of Meesho. “I had heard of them and wanted to meet them. In early 2018, I met them and was impressed with the business they were building,” said Ashutosh Sharma, head of India Ecosysem at Prosus. His firm first invested in Meesho, a reseller back then, in 2019. Prosus then followed it up, participating in Meesho’s funding rounds through 2019 and 2024.
Prosus helped the company transform from a social commerce firm to a high-scale e-commerce one. “Over a period of time, what we were increasingly more convinced about was this team's strategic vision of solving commerce for the next 300-500 million users, and they kept on taking the right calls just to enable that, which meant that the going direct to the consumer, pivoting from a WhatsApp, and I would not even call that a pivot," Saurav Jain, principal investor - India Ecosystem at Prosus. "It was more of a going vertical into catering to the same set of target group but going direct to them, rather than going via the reseller model.”
And this gives the firm the confidence to hold on to its investments further. “We didn’t want to sell in Meesho. We did some (sell through an offer for sale in the IPO) only to meet the regulatory requirements,” said Sharma.
IPO pipeline
In the last 12-18 months alone, the firm has seen four of its key portfolio companies such as Swiggy, Bluestone, Urban Company and Meesho listing on Indian bourses. At close of trading on Thursday, the firm is likely sitting on $3.95 billion in gains. Other companies such as Rapido, PayU, Vastu Housing, Minitfi, Captain Fresh are also lining up IPOs over the next 12-18 months. Prosus counts around 32 firms in its India portfolio.
Sharma is confident his firm will see an encore of the success it has seen in the recent past with other companies as well. “I am very, very hopeful. And the reason is simple. India is so extremely heterogeneous that you can make a product specific to a certain set of people. I think that allows for many new companies to evolve and launch a product which has a strong product market fit with that sub-segment of the society. So, heterogeneity of India allows many different companies to coexist,” Sharma said adding that the diversity will create “Meesho-like outcomes” in all sectors.
Even as it is ready to harvest, Prosus has been busy deploying capital in India. Earlier in August it pumped in $146 million in Ixigo, a listed new-age travel services company, a first for the firm. This calendar year alone, the firm has deployed around $675 million in India across companies such as Urban Company, PayU, Rapido, Ixigo, Wiom, Deccan AI, Codekarma and Arivihan.
In an interview with Mint in May, Fabricio Bloisi, the chief executive at Prosus had said his company is looking to reorganize its business by focusing on three key regions, including India.
“India is a very important market for us at Prosus. It is, in fact, our second biggest focus area,” Bloisi had said. The firm plans to narrow its geographical focus to Latin America, Europe and India. “We will invest many more billion dollars in India in the near future," he had said.