In June 2019, Naspers Foundry, a ~$77 million South Africa-focused fund made its first investment into SweepSouth; it was a $2.1 million seed round. At the time, the company said the Foundry will make equity investments in various amounts, primarily from Series A up to Series B.
Naspers is on the top 100 largest global companies list — 85th by its $108 billion market cap, just after Nike — and is one the world's largest tech investors, sitting on the cap table of companies in Europe, India, Asia and South America.
Since its first South Africa-focused investment, the firm invested in eight other companies in the country—Aerobotics, Planet42, LifeCheq, Nile.ag, FloatPays, Naked Insurance, Ctrl and WhereIsMyTransport—according to the company's website.
Amidst the global economic downturn, Naspers Foundry is shutting down its operations, however, it will maintain the investments, including writing follow-on checks in the aforementioned companies.
"The global investment environment, as well as the local South African one, has changed, and we have made clear the need for our business to adapt. In line with changes across the wider business, we have reviewed our early-stage investment strategy within SA to bring it in line with our international approach," a Naspers spokesperson told local media. "Naspers will continue to support the development of South Africa's early-stage tech sector, assessing the market and new opportunities in a way that is consistent with our other global markets."
Judging by its small portfolio despite being the largest VC fund in South Africa, Naspers Foundry deployed about half of its fund size before this closure. According to data sourced by BD Funding Tracker, between 2019 and January 2023, the fund wholly invested in seven rounds with a total of $14.5 million.
"While the closure of Naspers’ Foundry fund is undoubtedly a setback for the South African tech start-up ecosystem, it is not necessarily indicative of broader trends in the African VC market," Ivor Price, tech analyst and editor-in-chief of Ventureburn argues.
According to Price, "the decision to shut down Foundry is part of Naspers’ broader strategy to slim down its operations and focus on core businesses. The group has also recently sold off several of its other tech investments, including its stake in Tencent, a Chinese tech giant". Recently, the company disclosed that its cutting 30% of jobs at her corporate offices.
Aside from the downturn and operational strategy, South Africa's competition regulator in July 2022 said that Naspers excluded historically disadvantaged persons (HDPs), including people of colour and women, from the country's internet economy. Of the investments worth $40 million made by Naspers, only 13% of the founders and people of colour and 8% are women, this is the reflection of the poor diversity in the Rainbow Nation's VC landscape.
The regulator has also accused Naspers of anti-competitive practices. In 2019, the Competition Commission blocked the company's proposed acquisition of a 60% stake in WeBuyCars.