New Prosus chief Fabricio Bloisi to explore synergies between IPO-bound Swiggy and Berlin-based Delivery Hero

Fabricio Bloisi incoming CEO of Prosus and Naspers Group

Fabricio Bloisi, the incoming CEO of Prosus and Naspers Group, will explore ways in which Delivery Hero and Swiggy, two of the largest food delivery firms in the investor’s portfolio, can collaborate and yield better results together.

While he did not elaborate further, the rationale is understandable. Delivery Hero listed on the German stock exchange in 2017 so it can teach Swiggy how publicly listed companies ought to behave. The discipline and vigour can come handy as Swiggy looks to IPO later this year.

Even as Prosus works closely with Delivery Hero and Swiggy, Bloisi’s expertise in food delivery will give the companies an edge over their peers.

“The fact that I'm joining, we will have more space to collaborate between the business (Delivery Hero and Swiggy) or to try to share best practice. That's my goal,” Bloisi told analysts earlier this month after he was appointed the new chief executive to take over from July 1.

Bloisi’s background is primarily in the food-delivery space, and he’s currently the CEO of popular Brazilian food-delivery app iFood. Prosus invested in the startup in 2013 and acquired it nine years later. As of 2022, iFood accounted for 0.53 percent of Brazil’s gross domestic product (GDP), Bloisi said as he underscored the size of the company. iFood has only grown in size since then.

Considering his experience running and scaling iFood, analysts asked if it would be accurate to conclude that Prosus, and the Naspers Group, could increase its focus on food delivery in the future. Bloisi said that food delivery will be a focus area but was quick to clarify that companies across the board will get equal importance.

But the immediate focus on food delivery indicates Bloisi could find himself concentrating on Swiggy ahead of its listing. Prosus is Swiggy's largest investor, and holds a stake of around 32 percent in the food and grocery delivery startup. That translates to roughly $3.5 billion in value based on Swiggy’s last reported valuation of $10.7 billion.

“We have Harsha (Sriharsha Majety, Swiggy Group CEO) and the Swiggy team…they have been very successful (with) dark stores in the grocery area, and we are looking at it closely,” Bloisi told analysts.

While Prosus’ top executives are all looking for synergies between portfolio companies, Swiggy’s Sriharsha Majety, on his part, is spending more time with founders who have taken their companies public, he told Moneycontrol in January.

The increased focus on India however comes with its own set of challenges.

“I don't deal very well with pepper food/spicy food. So, I will have lots of challenges, but I will manage that, and be in India learning a lot over the next few weeks, hopefully,” Bloisi told analysts.

That is, however, unlikely to deter his plans of making companies partner with each other over the coming years. The collaboration could include sharing experiences when it comes to the use of artificial intelligence (AI).

iFood added a layer of AI to its offerings around five-six years ago, even before “AI”  became a buzzword. “Every week we can increase conversion rates and reduce acquisition costs by 1 to 3 percent because (our) new model is more efficient in handling things…the number is close to $200 million in savings just (with the help of AI),” Bloisi said.

Leveraging AI to save millions of dollars is a strategy Swiggy can definitely consider as it looks to lower cash burn and better its financial health before its IPO.

During his visits and tenure as CEO, Bloisi said he will stitch together ideas on how Prosus can use its global structure to leverage its India position. Asked about his key focus areas in India, while IPO-bound Swiggy found several mentions, the other companies were not left behind.

India, the world’s third-largest startup ecosystem, is an important market for Prosus, which has invested around $6 billion in the country in over 25 new-age companies. For its portfolio companies, which include Swiggy, Meesho, Urban Company, PharmEasy and Mensa Brands, the incoming CEO wanting to spend more time in India is good news, especially because several of them are hitting new milestones and will be looking towards their key investors while deciding next steps.

Prosus’ stake in Indian unicorns

Urban Company turned profitable in April, Meesho broke even in Q3FY24 and Swiggy is preparing for its IPO, which is slated for later this year.

But it's not all rosy.

Prosus is locked in a legal tussle with Byju’s. Another bet, PharmEasy, has seen its valuation plummet in a fresh funding round. It even wrote off an investment of $38 million in Zestmoney just before the company was acquired in a fire sale.

Prosus however said it is taking steps to steady its ship. In terms of prioritisation, Prosus, and the larger Naspers Group, will focus on its “gems”—the great businesses within its portfolio, as per Ervin Tu, interim CEO of the two companies. But the investor will also spend significant time in cleaning up.

“But we also have been in significant fix-it mode for two years. We will continue to try to find great outcomes for some of the underperformers. Sometimes we will choose to exit, we will shut down and we will sell,” Tu told analysts when asked on the broader strategies of the group. “Sometimes, even if we seek to sell, there's no bid for the business. And so, the best thing for the group is to try to at least ensure that the business in question is not a burden to the group.”

Last year, the group sold Olx Autos, Olx India's classified and auto transactions business, to CarTrade Tech. Globally, the Olx Group shuttered operations in Argentina, Mexico and Colombia, as per reports.