Naspers-owned Prosus is confident in its ability to build a European food delivery powerhouse as the technology investor announced a R79bn takeover of Just Eat Takeaway.com last month, despite low economic growth in the region.
Unlike emerging market countries such as China and Brazil, where the Naspers stable has seen huge growth in its investments over the decades, Europe presents a more lacklustre picture. Many investors are discounting the region as too mature and rigid, coupled with the view that the region’s raft of regulations stifle innovation for technology.
As the KOF Swiss Economic Institute highlighted in a 2024 report: “The list of problems facing European economies is long: resistance to reforms is generally high and many structural problems remain unresolved.
“Digital technology is lagging behind and no adequate response has yet been found to demographic change,” it said, referring to Europe’s ageing population and declining birth rates that have led to potentially reduced consumer spending.
Still, Prosus sees opportunity to expand its food delivery powerhouse in the region.
In February, the group said it had reached an agreement to acquire Just Eat Takeaway.com for €4.1bn, its largest investment yet.
Regarding Prosus’ strategy for growing the business, chief investment officer Ervin Tu told Business Day: “I would not prioritise country expansion as one of the levers or plays in the playbook. That will not be a significant part of the story.
“What you should anticipate is more around product innovation, technology improvement, the application of AI in the customer experience and for the couriers and drivers, [improvement] in the delivery of incentives and offers to customers, doing so in a much more targeted and personalised way.”
Tu said groceries, fintech and other e-commerce related offerings were also possibilities.
Despite Just Eat Takeaway.com operating in mature economies, Prosus sees growth potential, given lower penetration rates for food delivery services.
“It’s not like we expect that this business will grow like a business in India or Brazil, because Germany, the Netherlands and the UK don’t grow like those countries,” Tu said.
“At the same time, we believe that the growth potential is there, if you consider the specific dynamics of the businesses within each of these markets, their market share and what we believe we can do by applying technology further to the Just Eat Takeaway.com business.
“We are expecting growth, just not the same type of growth as you might get in India or Brazil.”
In 2020, Naspers and the Amsterdam-listed unit failed to secure a high-profile bid for Just Eat, losing out to Takeaway.com, which paid $8bn.
At the time, Prosus’ £5bn bid was seen as a sign of an ambitious strategy to build a bigger food delivery business to take on Silicon Valley giant Uber Eats and Amazon-backed Deliveroo.
While Prosus is now under fresh management, led by CEO Fabricio Bloisi, its ambition to build a European food delivery powerhouse remains.
This time though, it has bought a bigger entity: the combined Just Eat and Takeaway.com, at a lower price, all with the benefit of lessons learnt since the first attempt.
Just Eat Takeaway.com is in a much weaker position now, profitable in some markets but unprofitable overall, having reported a loss of €1.6bn in 2024. The company is now worth just a fifth of its peak in 2020 when the business was valued at more than €22bn.
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