Naspers sells stakes in MXit
Naspers sold its 30% stake in Africa’s largest mobile instant messenger, MXit, to technology investment firm World of Avatar for an undisclosed amount, two of the companies said on Thursday.
MXit and World of Avatar said in a joint statement that World of Avatar also buy a further 60 percent stake in MXit from founder and CEO Herman Heunis.
MXit operates a mobile-based chat service and social network with 43 million users in 120 countries.
World of Avatar founder Alan Knott-Craig, the son of the former Vodacom CEO of the same name, will take over as CEO of MXit.
Staff of Stellenbosch-based MXit will hold the remaining 10% of the company.
Herman Heunis founded MXit in 2001 when he developed a multiplayer game, and the message service was officially launched in May 2005 and Naspers bought 30% of MXit in 2007.
Heunis has steered MXit from being solely a social networking site to one that offers a range of services and activities for its customers including a virtual currency called “moolah”, classified advertisements, chat rooms, games and educational programs.
Knott-Craig Jnr said the deal just had one regulatory notification to meet before being finalised and then he would take over as MXit CEO in early October.
“The deal is pretty much done. We have big plans in mind, but the first thing is to consolidate a little bit and make sure the ship is steady. Things are not going to change overnight, the idea is to grow MXit at 10% per month and to really go big into sub-Saharan Africa,” he said.
Knott-Craig acknowledged that MXit was seeing increased competition from other mobile social networking services such as Whatsapp and Blackberry Messenger, but that MXit would continue to evolve and grow.
“The main reason why we bought MXit is because it is the largest digital community in Africa. We will keep an eye on the competition and what we can learn from them we will,” he said.
Heunis said that the deal had the full support of Naspers due to a pact made between the two to sell their shareholdings together.
“I have been in the software industry since 1980 and the early years of MXit were very tough. In 2005 I almost went insolvent, the company has really taken off, but I need a break,” he said.
Heunis praised Knott-Craig Jnr saying that he was well connected, had a good team of people and that he was young enough to take MXit to where it had to go.
He said that MXit had become much more than a messaging or communications tool and had developed a whole ecosystem, not only for its users, but for a range of companies that supply developers, advertising, content and other services.
“It has become a central hub for a lot of business activity. Another of our strong points was that we keep innovating. Our services can be accessed on high- and low-end phones and we are about to introduce a wallet so people can buy and sell services over MXit,” Heunis said.
Knott-Craig Jnr said the trust that Heunis had built up with the users would continue to be the heart and core of MXit’s operations. This would include protecting user identities and data.
“I believe very strongly that the protection of users comes above all else,” Heunis said.
Knott-Craig Jnr and his partner Francois Swart founded World Of Avatar just more than a year ago. It operates as the holding company for about 14 other companies that develop and supply services and products for mobile phones.—Reuters, I-Net Bridge