How many reasons are there to believe that AI can boost the businesses in a sprawling technology portfolio? If not a gazillion, then at least a Brazilian.
Prosus CEO Fabricio Bloisi knows iFood inside out. And he should, having spent more than a decade running the Brazilian food delivery start-up and scaling it into a market leader. For the past year or so he has been using his old haunt as a testing ground for Prosus’s own brand of AI, and as the latest set of full-year results for the Amsterdam-listed company (and non-identical twin Naspers) shows, this has been quite a success.
The push from Latin America propelled Prosus to a 24% jump in core headline earnings and a 57% rise in what it terms “ecosystem” revenue. Bloisi, who calls these the best results in the company’s history, dreams out loud about creating another $100bn in value and says the roll-out of “large commerce models” (LCMs) is the way to realise that and more.
And $100bn has a very specific meaning for the group. Give or take a few billion, that number represents the windfall from the early bet on Chinese behemoth Tencent that transformed Naspers from a Cape Town media company into a global consumer-facing technology investor. For many years, though, everything else was a rounding error compared with the value of the Tencent stake and the healthy dividend it paid.
Bloisi’s predecessor Bob van Dijk was tasked with using the money from China to build out a suite of e-commerce assets that shareholders would cherish. Unfortunately, or fortunately actually, Tencent kept growing at such a pace that everything else just looked bleh. The new investments were such a drag on the value that asset managers called it the “rump”, and a large discount developed between Naspers-Prosus and the value of the Tencent shares — more than 60% only a few years ago.
Taking the reins in 2024, Bloisi was keen to demonstrate that the Prosus rump was worth something. And he had some clout, as his own iFood was considered one of the best businesses in the portfolio.
New CEO, new buzzwords. Now Prosus no longer talks about “verticals” in e-classifieds, payments, food delivery and education technology. These days it’s “regional ecosystems”, each with a central pillar driving traffic. In Latin America, iFood, with its millions of monthly users, props up the ecosystem and the food delivery business, then serves as a hub for cross-selling everything from travel packages and events tickets to business loans.
The payments service iFood Pago, for example, grew aggressively, increasing revenue 219% to $463m. It turned profitable and now accounts for about a quarter of iFood’s total revenues. The online travel platform Despegar, acquired the previous year, is also rocketing (despegar is Spanish for “to take off”) thanks to a 21% bump in traffic from iFood users.
Neal Hoogwerf, equity analyst at Merchant West, says the management team’s narrative is that their LCMs — trained on the behaviour of 1-billion customers and 15-million orders a month — as well as their agentic tooling (by their own AI, Toqan and ToqanClaw) and consumer-facing “life assistants” will make every portfolio company operate better and cross-sell more.
The commercial case is straightforward: if the technology performs, it should simultaneously lift revenues and take costs out across the group
— Hannes van den Berg
Hannes van den Berg, head of South Africa equity and multi-asset at NinetyOne, says the underlying technology is genuinely compelling. “Where traditional search engines return results, LCMs learn from them. Prosus’s AI systems are built to understand consumer intent rather than simply respond to it — the difference between a search bar and a knowledgeable personal shopper who gets better at their job every single day. The commercial case is straightforward: if the technology performs, it should simultaneously lift revenues and take costs out across the group.”
Prosus, of course, is not only a Latin American business. The company in this financial year acquired Just Eat Takeaway (JET), a European food delivery business, and seems to still be digesting this big bite. It also has OLX, the classifieds platform with a substantial footprint in both Latin America and Europe, as well as food delivery and payments businesses in India, and a more modest investment locally in Takealot.
The Takealot Group, incidentally, showed its first full year of profit. Takealot itself has of course been in the black before, but for the group, which includes Mr D and other online shops, this is a milestone.
But Takealot is small fry compared with the push into Europe, where Prosus spent €4.1bn to bag JET.
And when it comes to the rollout of LCMs in an ecosystem-style format, “the fit is evident in LatAm, but unproven in Europe”, says Hoogwerf.
“JET is a large, low-margin, geographically sprawling delivery business in mature markets, being turned around via LCM rollout and product investment. That’s the narrative being tested, not the narrative being proven. They’re betting the LatAm playbook transfers to Europe, and the financial 2026 numbers show the cost of that bet before any payoff,” he adds.
In India, only three years ago, Prosus was rumoured to be mulling a listing for its payments business PayU, but made no solid moves. Now it seems to be looking at using payments with its food delivery businesses Swiggy and Meesho, not unlike its experiments in Latin America. But PayU itself has turned profitable according to the company’s preferred measure — adjusted ebitda — for the first time, contributing $18m.
Elsewhere, OLX has also been growing, making a $481m contribution to profit and increasing its margin to 48%.
Perhaps more importantly, these businesses now generate plenty of free cash for the group. This, coupled with the funds garnered from the nipping and tucking of assets that have fallen out of favour, will likely lessen the company’s reliance on selling Tencent shares to buy back its own.
The markets lapped up the results on Monday. Prosus shares on the JSE rallied more than 4%. But investors are still down about 27% on a year ago.
Aeon Investment Management chief investment officer Muneer Ahmed sees a mixed picture on execution in the latest results. Though Prosus continues to make progress in food delivery, investors know that the path to scale remains long and capital-intensive. “And the market will need to see clearer evidence of profitability improving before giving full credit.”
For now, Prosus will keep buying back its own shares to keep the discount under control. The numbers are eyewatering. Naspers and Prosus have together bought back about $46bn of their own shares over the past four years.
“We’ve essentially reduced the share count by about 30% over that time. And we have increased the underlying NAV exposure on the per share basis by about 16%,” says CFO Nico Marais. “Our discount came down to as low as about 26% in October last year. So that’s a significant improvement, and currently we are around 37%.”
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