Online pharmacy startup, PharmEasy, continues to be a drag on Prosus’ India portfolio after it delivered an internal rate of return (IRR) of -38 percent (negative), the investor said in its half yearly (H1FY25) disclosures on December 2. Meanwhile, edtech company Eruditus had an IRR of 14 percent, among the lowest, filings showed.
Eruditus is however the only edtech that has delivered positive results for Prosus from its global portfolio. It has backed Byju's, Stack Overflow, Skillsoft and others.
On the other hand, ElasticRun, the B2B e-commerce platform, delivered the highest IRR at 23 percent. Low value e-commerce company Meesho, fintech giant PayU and food tech company Swiggy all delivered an IRR of 20-21 percent each, Prosus said on December 2.
During the same period last year, PharmEasy had an IRR of -44 percent, Eruditus at 22 percent, ElasticRun at 31 percent, Meesho had an IRR 32 percent, PayU was at 30 percent and Swiggy had an IRR of 7 percent, respectively.
This year, Prosus said, there is an “inflection in the IRR, but more improvement (is) needed.” During the same period last year, it said its “ambition (is) IRR of 20%+” and it will continue to work towards that number to deliver returns.
It added that it will look to pump in more capital over the coming years in India. “If we can have the required conviction in opportunities, our ambition would be to increase capital deployment to enhance our ecosystems, growth, profitability and value creation. Our focus has increased meaningfully over recent months,” the investor said.
IPO pipeline
Prosus, which has invested over $8 billion in India over the years, said Meesho, BlueStone, PayU and Urban Company are all companies from its India portfolio that are likely to go public in the next 12-18 months, as the businesses mature.
“We are very excited about India. We started investing in India seven years ago, much before everyone was talking about the country’s potential. We made a good call to make India our priority and the Swiggy IPO is just the first big result, we have many more ahead,” Prosus and Naspers CEO Fabricio Bloisi told reporters in a call after announcing results.
Prosus, on December 2, said it has invested $80 million in supply chain company Mintifi and $100 million in Vastu Housing Finance, as it resumes investments in the world’s third-largest startup ecosystem. However, asked when $500 million cheques will make a comeback in India, as in the past, CEO Bloisi said it was difficult to predict for now.
“We have an ecosystem in India where we believe our companies can help our other companies to grow faster, and that's a very high value. Also, we have around 30 investments in India and have many more IPOs ahead over the next 1.5 years. We started at the right time. It is a big opportunity, and we are going to crystallize a lot of our value through our India investments,” he said while adding that the investor will look for promising founders.
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