Netherlands-listed technology investor Prosus, formed out of the corporate venturing assets collected by South Africa-listed media group Naspers, has sold 2% of China-based gaming and social media group Tencent for $14.7bn.
This is the world’s largest-ever block trade – 191.89 million shares for HK$114.1bn – but leaves Prosus still holding 28.9% of Tencent, according to newswire Reuters.
The block trade – or the usually private, single trade of a large amount of securities – surpassed the previous record set in 2018 when Naspers also sold 2% of Tencent for $9.8bn, Refinitiv data showed. Its remaining stake is worth about $200bn, from an original $31m corporate venturing deal struck 20 years ago.
Bob van Dijk, CEO at Prosus, said: “The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock.”
Prosus, which also invests in online food delivery platforms, classified marketplaces and digital payments businesses, has built up its warchest for new and existing investments given the rapid scaling up of the innovation capital ecosystem at the later stage.
Global venture capital investments hit $125bn in the first quarter, the first time the figure has surpassed $100bn in a quarter, according to data published by Crunchbase, even though deal volumes held relatively stable.
The opportunity for social network or “platform economy” companies to dominate across sectors or verticals remains, especially as Tencent peer Alibaba’s share price rose on Monday after it was able to have the term written into law.
This is particularly the case as finance becomes embedded into media. As James Thorne, a venture capital reporter at PitchBook, noted at the weekend, Angela Strange, general partner at VC firm Andreessen Horowitz (A16Z), made the case in 2019 that most people would be working in financial services soon, even if we don’t change jobs, as finance becomes embedded into software.
At that point, media and content becomes the differentiator, which is why A16Z calls itself a media company that monetizes through venture capital.
In his annual letter last week, Jamie Dimon, CEO at bank JPMorgan Chase, said: “Fintech’s ability to merge social media, use data smartly and integrate with other platforms rapidly (often without the disadvantages of being an actual bank) will help these companies win significant market share.
And this helps explain why even in a world where media advertising is dominated by Facebook and Google that there remains so much attention and focus on social media and networks.
Corporate-backed deals in social media, networks and instant messaging from 2011 to 2021
Data as of March 30, 2021
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