Prosus turns spending focus on fast-growing online car dealers

Prosus NV plans to invest further in its fast-growing online car dealership business, expanding an e-commerce empire that already includes payments, food delivery and education.

The Dutch company will use some of its surplus cash to add scale organically to the global auto business, Chief Executive Officer Bob Van Dijk said in an interview. The unit has seen volumes soar and has reached $1 billion in transactions, offering services including insurance and financing as well as buying and selling, he said.

Join heated discussions with the Moneyweb community, and get full access to our market indicators and data tools while supporting quality journalism.

R63/month or R630/year

SUBSCRIBE NOW

You can cancel at any time.

Prosus has about $5.5 billion available for investments, after accounting for the $4.6 billion committed to the acquisition of Indian online payments service BillDesk plus buyback obligations.

“Our car transactions business is at a fairly early stage, and we want to really build this business,” the CEO said. “We are investing in places including Indonesia, India and Eastern Europe, where we need to add things like inspection centers.”

The online used-auto market has taken off during the coronavirus pandemic, as showroom visits slumped and a computer chip shortage hampered production of new cars. Vroom Inc. doubled its business in the first half of the year, while Carvana Co. sold 200 272 vehicles in the same period, a company record.

Prosus reported 69 000 car transactions in the six months through September, compared with 37 000 in the same period a year earlier.

Prosus said this week analysts have valued its e-commerce portfolio at about $50 billion, excluding its stake in Chinese tech giant Tencent Holdings Ltd. The market rates the same companies at close to nothing, and the investment group is looking to alter that perception.

© 2021 Bloomberg