In the spirit of deleveraging, Africa’s most valuable company and largest tech major, Naspers said it is closing Markafoni, its Turkish e-commerce and fashion company at the end of June.
Naspers issued the statement earlier, Thursday, citing a challenging economic environment.
The group said in the statement that despite initial success, the business is not scaling sufficiently to be sustainable and in a challenging economic environment for this type of business, the decision was taken to close. Markafoni would like to thank its customers and business partners for their loyalty over the years.
Naspers added that the closure of Markafoni is a standalone decision (for that business) and, as the business models are quite different, has no impact on other Naspers companies and investments in Turkey. We believe Turkey remains a good growth opportunity for these other businesses, which all continue to gain traction and scale.
To bring the matter into perspective, Markafoni has been online since 2008, the inability of the company to scale into profitability is a major dent on its future.
The decision to shut down Markafoni might not be unconnected to Naspers inability to either get a good deal from a buyer or any buyer for that matter. Naspers has been known to exit most ventures through a share sale of its part stake or an outright sell-off.
It would be recalled that Naspers alongside other investors recently exit Souq.com, the largest eCommerce company in the Middle East and Levant. The company was sold to Amazon, the world’s largest eCommerce player who used the acquisition to cement its entrance into the region.
In some other ventures that are crucial to its group standing, Naspers is also looking for a way out. Last week, the company’s Chief Financial Officer announced that it is looking at signing a content deal through its media and entertainment unit Multichoice/DSTV with MTN Group, the largest telecom carrier in Africa. Many sections of the market are suggesting that Naspers is looking at selling off the loss-making venture in order to have some cash back.
Naspers has been a ‘one-hit wonder’ story. Its USD33 million investment in China’s Tencent has seen its company’s value multiply to USD100 billion to make it the most valuable publicly-quoted African company.