Prosus acquires Brazilian online food delivery service iFood

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Global consumer Internet Company Prosus, which is majority owned by South African Internet Company Naspers, disclosed that it has reached an agreement to buy the remaining 33.3 percent stake in iFood. With a market share of more than 80 percent in the country’s food delivery market, iFood is a Brazilian online food delivery service.

The stake was bought from minority shareholder Just Eat Holding Limited for €1.5 billion in cash plus contingent consideration of up to €300 million. Following the transaction, Prosus and its affiliate company, a Brazilian investor in technology companies, Movile will fully own iFood.

  • Prosus, which is majority-owned by South Africa internet group Naspers, announced that it has entered into an agreement to acquire the remaining 33.3 percent stake in iFood.
  • The stake was bought from minority shareholder Just Eat Holding Limited for €1.5 billion in cash plus contingent consideration of up to €300 million.
  • Naspers has a primary listing on the Johannesburg Stock Exchange (NPN.SJ) and a secondary listing on the A2X Exchange (NPN.AJ) in South Africa and has a level 1 American Depository Receipt (ADR) programme which trades on an over-the-counter basis in the US.

According to an article by TechCrunch published on August 19, 2022, while Just Eat Takeaway said that its iFood equity value has increased five-fold over the lifespan of the joint venture, the sell-off comes amid troubling times for the company, which resulted from a US$7.6 billion merger between the U.K.’s Just East and Dutch rival Takeaway.com back in 2020.

Just Eat Takeaway Financial statements for H1 2022. Brazilian market leader iFood continued to deliver strong growth in H1 2022. GTV grew 23 percent and Revenue grew 28 percent in H1 2022 compared with H1 2021. (Photo/ Just Eat Takeaway)

After its valuation plummeted more than 80 percent in 10 months, news emerged in July that Just Eat Takeaway was scaling back in France, resulting in 390 layoffs. And less than a year after its US$7.3 billion Grubhub acquisition finally closed, Just Eat Takeaway revealed it was looking to offload Grubhub as part of a broader pursuit of “sustainable, profitable growth.”

The company said that it plans to use its iFood proceeds to strengthen its balance sheet, while also honoring repayments on upcoming debt maturities. It also confirmed that it “continues to actively explore the partial or full sale” of Grubhub.

“Just Eat Takeaway remains focused on improving its profitability and on a disciplined allocation of capital,” the company wrote in a statement.

Prosus has a strong track record of investing in, transforming, and scaling food delivery businesses in some of the world’s highest-growth markets. Currently, Prosus has a broad global perspective on the food delivery industry with a presence in 57 markets globally. Prosus is well-positioned at the forefront of the transformation that is happening across the food delivery value chain and has built a leading global portfolio of online food delivery companies, including iFood in Latin America, Swiggy in India, and Delivery Hero, which has a presence in more than 50 countries. Prosus is also an active investor in adjacent businesses including Flink, Foodics, Oda, and Sharebite.

iFood has performed exceptionally well since Prosus first invested in the business through Movile, founded by Fabricio Bloisi, in 2013. Starting as an online food ordering website, the company rapidly developed into an industry leader with a reputation for innovation. According to an article by Business Wire published on August 19, 2022, iFood stands out among the first to develop its own delivery, which is now profitable.

‘’We first invested in iFood nearly a decade ago and during this time Fabricio and the team have built a world-class food delivery business. They have shaped the sector in Brazil, creating a platform that serves 330,000 restaurant partners, provides income opportunities for 200,000 delivery partners and delivers approximately 70 million orders every month. Increasing our stake to full ownership is a demonstration of our committed and disciplined approach to investment and reflects our confidence in the long-term potential of iFood. We are excited to continue to be a supportive and active partner for iFood as the company steps into its next phase of innovation and growth,” said Bob van Dijk, CEO of Naspers.

Speaking on the acquisition, Prosus Food CEO Larry Illg stated that iFood has established itself as a technology leader in Brazil and that its success places it among the most innovative food delivery companies across the globe.

“The Brazilian food delivery sector has grown significantly over the past four years. There is substantial opportunity for further expansion in both the restaurant food delivery business and in building out the platform in areas such as grocery and quick commerce. We are thrilled to be fully backing the company on its path to transform the entire food chain to better serve customers,” he added.

For iFood founder Bloisi: “Prosus has been a committed partner to iFood and Movile over the last decade. I am delighted that they continue to have such a strong belief in our vision and ability to build a successful business that Brazilians can continue to be proud of. Together we will build a platform of offerings that provide Brazilian customers, delivery partners, restaurants, and more, with the best experience in food, grocery delivery, and fintech.”

Established in 1915, Naspers has transformed itself to become a global consumer internet company and one of the largest technology investors in the world. Through Prosus, the group operates and invests globally in markets with long-term growth potential, building leading consumer internet companies that empower people and enrich communities. Prosus has its primary listing on Euronext Amsterdam and a secondary listing on the Johannesburg Stock Exchange and Naspers is the majority owner of Prosus.

While Naspers has a primary listing on the Johannesburg Stock Exchange (NPN.SJ) and a secondary listing on the A2X Exchange (NPN.AJ) in South Africa and has a level 1 American Depository Receipt (ADR) programme which trades on an over-the-counter basis in the US.

In South Africa, Naspers is one of the foremost investors in the technology sector and is committed to building its internet and eCommerce companies in the country. These include Takealot, Mr. D Food, Superbalist, Autotrader, Property24, and PayU, in addition to Media24, South Africa’s leading print and digital media business.

Read: Noteworthy Tech acquisitions in South Africa in 2022

Albert is a Chemical Technologist and Author. He is passionate about mining, stock market investing, Fintech and Edutech.

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