South African media firm Naspers increased its investment in online food takeaway firm Delivery Hero on Thursday, buying half the stake of e-commerce investor Rocket Internet for 660 million euros ($775 mln).
The move comes as Rocket Internet, which built up and invested in dozens of businesses from fashion e-commerce to food delivery, tries to optimize its portfolio after its share price has performed poorly since it listed in 2014.
Naspers first took a stake in Delivery Hero in May when the German firm issued new shares a month before it went public. On Thursday, Rocket said it was selling half its 26 percent stake to Naspers.
The move takes Naspers’ stake in Delivery Hero to 23.6 percent. Naspers Chief Executive Bob van Dijk said the investment underlined his confidence in the firm’s prospects, particularly in developing markets.
“Many markets have experienced significant traction already, but we believe the potential is far greater in high-growth markets than that observed in the West,” he said in a statement.
Rocket Internet shares were up 1.4 percent by 0709 GMT, while Delivery Hero was down 0.6 percent.
Delivery Hero, the world’s largest online takeaway food delivery company, reported a 66 percent jump in first-half revenue and sharply narrower losses on Wednesday, after slightly slowing its expansion with a focus on breaking even in 2018.
On Thursday, Rocket Internet reported that aggregate revenue for its leading start-ups rose 29 percent to 1.24 billion euros in the first half, while the adjusted loss before interest, taxation, depreciation and amortization was 161 million euros, down from 204 million a year ago.
Rocket said its meal kit delivery company HelloFresh, which has been considering an initial public offering, saw net revenue rise 49 percent to 435 million euros, while its loss rose slightly to 47 million euros.
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