Prosus Ventures Embraces Early-Stage Bets in India
Prosus, a well-known investor in the Indian startup scene, is shifting its focus from larger bets to early-stage investments as a result of suffering sizable losses. Having made significant investments in unicorns such as BYJU’S and Pharmeasy, the Dutch investment behemoth is now focusing on seed and early-stage enterprises in an effort to reduce risks and promote long-term growth.
Strategic Shift: From Unicorns to Seed Investments
After making over $7 billion in investments in Indian startups, such as Meesho, Swiggy, and Urban Company, Prosus is now shifting its focus from high-risk ventures to more modest and controlled ventures. Prosus’s significant deals have consistently decreased since 2021, from 10 deals in 2021 to just one late-stage deal in 2024, according to data from Inc42 and Tracxn. On the other hand, Prosus has made more Series A rounds in recent years, indicating a notable increase in early-stage investments.
First Seed Stage Investment in India
In February 2023, Prosus made its first seed stage investment in India, participating in a INR 160 crore round for Bengaluru-based Kratos Studios. This move marked the beginning of a new investment strategy, focusing on nascent startups with high growth potential. Prosus also joined a $26 million seed round for Gurugram-based lifestyle platform Lyscraft and invested $35 million in AI platform EMA, indicating a diversified interest in emerging technologies.
Leadership Changes Driving New Strategy
Significant leadership changes have been made at Prosus in order to successfully implement this new approach. Since taking over in April 2024, Ashutosh Sharma has been in charge of investments in Southeast Asia and India. Furthermore, in May 2024, Fabricio Bloisi, the previous CEO of iFood, was named CEO of Naspers and Prosus, contributing new insights to the company’s worldwide operations.
Challenges with Previous Investments
Prosus’ shift to early-stage investments comes after experiencing substantial setbacks with some of its Indian unicorn investments. The $500 million investment in BYJU’S, for instance, has been written off, and Pharmeasy’s valuation saw a 90% markdown. Other investments, like those in Zestmoney and Fashinza, have also faced challenges, prompting Prosus to reassess its investment approach.
Hopes Pinned on Upcoming IPOs
Prosus is positive about impending initial public offerings (IPOs), such as Swiggy, Eruditus, and PayU India, in spite of these setbacks. Despite being unprofitable, Swiggy, which quietly filed for an IPO, is predicted to generate INR 10,000 crore in sales by FY24. With reduced EBITDA losses, Eruditus is getting ready to reverse flip to India prior to a possible IPO. Prosus portfolio company PayU India is likewise preparing for a late 2024 public listing.
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