In 2001, South Africa based Naspers made an investment in a relatively unknown Chinese firm named Tencent. This shrewd move has since become world renowned as one of the most lucrative and profitable “investments” in the history of investing.

Naspers, a small, local multi-media holding company under the stewardship of Koos Bekker, invested $32 million in Tencent, acquiring a 46.5% stake. This early investment was a significant boost for Tencent, providing the financial support and lasting partnership needed to expand and develop its products. Thus it facilitated the expansion of Naspers products and the development of new technologies like improving the quality of their systems on the mainframe – the main software and systems used to hold the internet and marketing by providing the financial resources necessary for research and development; R&D aids product innovation and talent acquisition in the form of creative directors. Creative directors manage the ‘big picture’ and focus on developing customer experience. As Tencent continued to grow, so did the value of Naspers stake. Today, Naspers owns approximately 31% of Tencent, making it one of the largest shareholders in the Chinese tech behemoth. The initial $32 million investment has transformed into a $134 billion asset – one of the greatest investments returns ever made. This is a 294.1% return on investment to what the asset is worth now which is significant compared to the average ROI which is 7% a year. The next most substantial investment in the firm is Hua Teng Ma’s 8.5% stake who is the managing director, showing Naspers’ dominance within the firm. 

Naspers investment in Tencent was a move that has revolutionised the company and the tech world. The extraordinary monetary gains from this investment have significantly bolstered Naspers financial position, enabling it to fund a diversified portfolio of tech investments and ventures across the globe. Their diverse portfolio is crucial because it is almost impossible to predict market and industry shocks. A firm ought to be well resourced and covered in other areas so not all of their capital is affected. Furthermore, the success of Naspers investment in Tencent has had widespread effects within the global landscape, elevating Naspers status as a significant player in the venture capital world. The global effects were far-reaching because this investment gave other companies the confidence to invest in tech firms, such as Vanguard who invested into Meta. Meta is a parent company that owns and manages Facebook and Instagram. Without all these investments into the future of technology we wouldn’t find ourselves surrounded by the capabilities of the advanced technology of today. Naspers investments have spanned a wide range of sectors, from e-commerce to fintech and more diverse firms such as webuyanycar and News24. This demonstrates Naspers business integration strategy, conglomerate diversification, which Involves expanding into businesses unrelated to the firms current operations which means they can be involved in many different markets.

For Tencent, Naspers’ constant backing has played a pivotal role in the company’s growth and success. The provision of capital and guidance allowed Tencent to evolve beyond QQ (it’s original messaging software offering) and build a vast system that includes WeChat (used by over 1.3 billion humans), a chat platform predominantly used in Asia and a significant stake in the world’s most prominent gaming corporation, Epic Games. 

Naspers’ investment in Tencent demonstrates the value of long-term projects, and endorsement in what was the rapidly evolving tech space in the early 2000’s. Naspers was given the confidence to invest in the TenCent start-up because it had rapid growth with an annual growth rate of 44% and became a leader in its field within a few years. The two companies have maintained a strong partnership for over two decades, evolving and growing together. This partnership has not only been financially beneficial but has also led to innovations in areas like social networking and digital entertainment; initiatives that permeate our everyday lives and will have a lasting impact on our planet. The positive impact and widespread nature of this can be seen because so many of the chat systems we use and games we play have been, in some way, contributed to by TenCent. Although, as with all investments, there are never any certainties especially in the tech industry, as a result along with the research done prior to investing, a huge element of this success is down to luck, but always a nature of skill can be rewarded.

What began as a modest investment in 2001 has grown into a monumental success story, significantly impacting both companies and the global tech industry. Naspers’ early belief in Tencent’s potential has paid off , illustrating the power of strategic vision and long-term commitment in the ever-evolving tech ecosystem. A similarly insightful investment is that of Berkshire Hathaway and that was a $35 billion investment into Coca Cola that has a market value now of $100 billion. Yet even this does not compare to Naspers investment in Tencent. It is the generation of approx. $135bn of value through a speculative investment by a small South African firm into an unknown Chinese start up that qualifies this as possibly the greatest financial investment ever made!