Was Naspers right to sell out of Flipkart? Ask founder of $100bn Vision Fund

By Alec Hogg

Investment pundits are digesting Walmart’s record breaking deal last week when it acquired control of India’s ecommerce leader Flipkart. In South Africa, too, where fund managers are debating the decision by the JSE’s biggest stock, media group Naspers, to cash in its Flipkart chips. Not all believe it did the right thing by banking a $1.6bn profit (and a 257% return).

Flipkart’s application loading page, left, and the Myntra.com website are displayed on an Apple Inc. iPhone 5c and iPad respectively.

I’d urge those critics to invest in the latest edition of The Economist whose cover features a picture of the founder of Japan’s SoftBank Masayoshi Son, under the headline “The $100 billion bet.” This refers to the new Vision Fund created by Son’s company which invested $28bn with the Saudi and AbuDhabi sovereign wealth entities kicking in another $60bn. Other contributors include Apple Inc.

This $100bn Vision Fund is targeting Silicon Valley, aiming to buy into young companies that operate in “frontier technologies” ranging from robotics to the Internet of Things (IoT). Son’s new venture intends competing with Google, Facebook and Amazon, which until now have been the most popular sales options for successful startups.

So what has this to do with the Naspers decision to cash in its Flipkart stake? Well, the only other major investor to sell out was SoftBank. And with so much of Son’s money looking for new homes, there was surely a good reason for tech’s hottest investor to exit its $2.5bn Flipkart stake (banking $4bn). At the very least, Naspers is in good company.