Prosus NV plans to continue investing in its fast growing online car dealership business and building an e-commerce empire that already includes payments, grocery deliveries and education.
The Dutch company will use some of its excess cash to organically grow its global auto business, CEO Bob Van Dijk said in an interview. The unit had seen volumes spike, reaching $ 1 billion in transactions, providing services such as insurance and financing, as well as purchases and sales, he said.
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Prosus has approximately $ 5.5 billion available for investment after taking into account the $ 4.6 billion acquisition of the Indian online payment service BillDesk plus repurchase commitments.
“Our auto transaction business is still in its relatively early stages and we really want to build this business,” said the CEO. “We are investing in Indonesia, India and Eastern Europe, among others, where we need to add things like inspection centers.”
The online used car market picked up momentum during the coronavirus pandemic as showroom visits collapsed and a shortage of computer chips hampered the production of new cars. Vroom Inc. doubled its business in the first half of the year, while Carvana Co. sold a company record of 200,272 vehicles in the same period.
Prosus reported 69,000 auto transactions in the six months ended September, compared to 37,000 in the same period last year.
According to Prosus, analysts this week valued its e-commerce portfolio at around $ 50 billion, excluding its stake in Chinese tech giant Tencent Holdings Ltd. The market rates the same companies next to nothing, and the investment group is trying to change that perception.
© 2021 Bloomberg