Good morning. Hey, good morning. Welcome, everybody. Welcome to Amsterdam. [Non-English content] for everybody who's Dutch in here. I see a lot of new faces here. I'm actually really excited about that. I see a lot of familiar faces as well. Welcome to those of you who I've seen in the past. I think the last time we were together in a setting such as this was about two years ago when we were in New York. I'm actually really pleased to say that we've made a tremendous amount of progress in those two years. In fact, we created a lot of value in those two years, and we want to talk today about the progress we've made. Actually, more importantly, what we want to spend most of our day on is looking forward.
Looking forward to what the company can be, looking forward to how the growth can happen from here. You see me on stage now, but what you'll see mostly during the day are our operators, the people who run our core segments, and you'll hear them tell their story firsthand. You'll have the opportunity to ask all the questions you have about what we're doing and where we're going with our businesses. What I want to do is actually kick us off today. What I'll do is I'll frame some of the macro trends that shape our investment strategy, and I'll highlight how those will actually help us to grow and be successful from here. As a group, we've grown into one of the top 10 global consumer internet companies.
With a valuation of about EUR 100 billion, we really have a firm spot in this group of companies. One of the things that I think we are very proud of, as a leadership team of Prosus, that we actually are growing fast, very fast for a company of our size. We are still investing considerably to maintain that growth over time. We have leadership positions in different internet models in 77 countries. If you look at all the products that our companies make, we serve a global audience of 1.5 billion customers every single month. What makes up Prosus? You'll hear more about that today. You saw some of it in the opening video. We have OLX, which is the world leader in online classifieds. To give you an idea of the size, it serves 330 million customers every single month.
It's one of the largest e-commerce franchises in the world. Martin will come actually right after me, who will present this business, and he does that well. After that, we have Laurent presenting PayU. PayU is our global payments and fintech business. It has a great global footprint, very strong in India, and processes, at this point in time, more than $30 billion worth of transactions every single year. In the last two years only, we've built one of the leading portfolios of food delivery companies in the world. We are tremendously excited about the potential of food delivery. We'll actually go in depth today. Larry, who runs that business, is here today, but he's also brought Harsha and Fabricio, the CEOs and founders of two of our most exciting portfolio companies. You'll hear it again directly from them.
Obviously, we are the largest shareholder in Tencent, and the progress that Tencent has made has benefited us as well, as has the long-standing partnership we've had with Tencent over the years. We are a very large top 10 global consumer internet group, but we're actually also by far the largest internet group in Europe. This is a comparison of the top 10 consumer internet businesses, listed consumer internet business in Europe, and we stand out here. We actually, I think you know all of this, but if you go down the railway track in that direction for about 3 km , you're at the Euronext Amsterdam, where we're listed. We don't put up this slide to feel good about ourselves or to brag. I think the reason why we put this up is because of the scarcity value that Prosus represents.
Because through Prosus, you get access to technology in China, in India, and other phenomenal growth markets around the world. We know that Europe is starved of technology and it's also starved of growth, Prosus presents both at scale. We are actually really pleased to see a number of investors that are not so familiar to the group, but we hope after today, I think you've learned a great deal about the group and what we stand for. It is just in terms of scarcity value, we think we stand out, but it's not just about scarcity. I think a very important part of our story is actually around performance. It's around value creation. This shows our share price over about a decade.
I remember when I took the CEO role, which is about five and a bit years ago, the company had a market cap of around the EUR 40 billion mark. Now we're well over EUR 100, and it's been a great ride indeed. That is actually not so much what it is about today. It's not about the past, it's really about the future. What I want to tell you about is how we create the next EUR 100 billion in value, and we set up the company well for the next 100 years. I think if you think about the future, right? You are investors, you're return focused. I think it's really important to see where return is created in the world. I think what we can agree on, hopefully, is that technology has really shaped financial returns in the last few years.
I find this a stunning graph. It shows basically the world's top technology stocks and the rest of listed companies without tech and how that has developed over the last few decades. Just to be clear, this is earnings, right? This is not valuation, but this is earnings. This is profit. This is the stuff you and I love. It's not fuzzy. What you see here is that up until about 2012, these lines actually followed a very similar path. They started diverging in 2012, and what really happened at that point in time is that some significant consumer tech companies came to scale. Companies like Facebook, companies like Amazon, Google, Tencent, they got to scale, and at that point in time, their earnings started growing at a considerably faster rate than the rest of the world.
Actually, if you look at the last five years, just about all the value creation has come from technology companies. I would say it's fair to say that I don't see a real catalyst why this will change. I think technology has shaped the financial performance of the last number of years, and I think it will continue to do so going forward. That is really the cornerstone of our strategy. We have, as a company, been working quite hard to become a 100% consumer internet company, and that's something we succeeded in doing at the beginning of this year when we spun out our MultiChoice business. That's a cornerstone of our strategy going forward. The reason why technology companies have changed the financial world is because they have fundamentally changed the real world that underlies it.
You may have seen some of this before, but I think what we've really seen is that technology has turned whole business models upside down across the world. By now, you see that more money is being spent on internet advertising than on TV advertising. I remember a decade ago, that felt unthinkable. Even five years ago, that felt actually unlikely to happen. We know that online retail by now is bigger than all department stores combined. We know that digital music is larger than all physical music combined, and people spend more time using the internet than they do watching TV. Again, these all may feel familiar to you, but actually a decade ago, I would say this was unthinkable. Even five years ago, this sounded like a very unlikely scenario to play out.
This is a U.S. example, but these trends, they are obviously universal. As a group that operates in more than 90 countries, we see these trends everywhere. We see the data that shows these changes everywhere, whenever there are discrepancies, when there are opportunities, that's where we jump in and invest fundamentally. I think that's a very important starting point for our strategy. Technology has shaped the financial future and actually will continue to change the world going forward. It's not just about technology. I think there's also been a tremendous change in where value is created geographically. I think this picture shows that well.
What you see on this slide is the top 10 companies by GDP corrected for purchasing power parity. What you see here is that actually corrected for purchasing power parity in 2018, for the first time, China was larger in terms of GDP than the U.S. It is my job, I think, and I think you probably agree as shareholders, to prioritize. I think prioritizing by size and growth is actually really important when you make long-term investments like we do. I think what is clear for me from this picture is the balance of economic power and the balance of growth is actually shifting eastwards, and it's shifting eastwards quite rapidly. China is a very big market, and we obviously have fantastic exposure to the Chinese market through our investment in Tencent.
This picture is, I think, insightful, but if you fast-forward this picture to 2030, the result is even more dramatic. Just to briefly explain what is on the slide here. The bottom half of these bars is actually what you saw on the previous slide. It's the GDP of the country corrected for purchasing power parity in 2018. The top half of the bars is the growth between 2018 and 2030. There's a lot of things that stand out from this graph. The first thing is that actually India overtakes the United States in GDP, corrected for PPP in 2030. That's a big deal, and you'll hear more about India today. You'll actually hear a lot about India today, one of the reasons why that's one of our core markets. You see other markets here that we consider to be our home turf.
You see Indonesia, Turkey, Brazil, and you see Egypt, Russia. Those are markets in which we, I think in all cases, have a strong food delivery business. In all cases, we have very strong classifieds business. It's not a coincidence that we're investing in these markets. Maybe to look back at China for a second. What you see from the first two bars is that actually China in 2030 is more than twice, or the first and the third bar, China is more than twice the size of the U.S. GDP corrected for PPP in 2030. If you look at the two top bars, you see actually the growth that will come out of China is about 5x of the growth that will come out of the U.S. in those 12 years.
I think that is a key reason why we are extremely bullish about China in the long term and why we are very committed to our investment in Tencent. I think one of the things that strikes me, and I'm sure you have visited China in the last few years, is that where it used to be the case that a lot of the innovation happened in the West or in the Bay Area and it got implemented in the East, actually, these days, innovation seems to be happening more in China than anywhere else. I think this is a good slide to show it. What it basically shows, it's on a number of dimensions on which you could measure it.
I think you could debate what the right measure is, but a number of dimensions we show the relative size of China versus the U.S. in technology. When the level is 100, basically it means that they are about the same size. What you see here, this is a static picture, but over time, you see actually China catch up quite quickly with the U.S. in terms of venture investments, in terms of R&D, also in terms of AI. I think actually in terms of AI, they're just about, depending on which measure you take, about to overtake the U.S. There are a number of areas where China is already substantially ahead of where the U.S. is. For example, in e-commerce volumes, but also in the number of mobile internet users where China is an absolute breakout.
There are obviously some business models where China is actually miles and miles ahead of the U.S. Mobile payments is online payments is probably the best example where it's at least a 10x advantage that China has over the U.S. I think that is a decent illustration of why we are very bullish about China tech for the long term. China stands out in terms of size and stands out in terms of innovation, I want to get back to India because in terms of growth and transformation, actually India is probably the most exciting country in the world today. India is really taking a digital leap.
Again, there's many ways of showing the same picture, but I think this illustrates why we consider India to be one of our core markets, why India actually has been a priority for each of our segments, you'll hear Martin speak about it, you'll hear Laurent speak about it, you'll hear Larry and Harsha speak about India. What's basically happened in India is a pace of change that is, I think, even faster than what we've seen in China. The number of smartphones has grown very rapidly in India. As a result of it, internet users have grown because there's basically no fixed line internet in India of any volume. Smartphones have grown tremendously. Mobile internet users have grown tremendously, the cost of using your phone in India has come down about a factor of 60 in a very short amount of time.
As a result of that, the data consumption, the mobile data consumption per capita in India has grown a factor 100 in the last few years. This is something that you may know, but I didn't know it until a while ago. Actually, the data consumption per capita in India is the highest in the world. It's higher than Korea, it's higher than Japan, it's higher than the U.S., it's higher than Western Europe. India has taken a digital leap, and that's why we think as a company, this provides a tremendous range of opportunities that we're investing against.
I think one of these examples is actually online payments, which really has exploded in the last few years, fueled by government regulation, but also fueled by technology and innovation. I think the important conclusion for us is that innovation is no longer a thing of the West, but a lot of innovation is happening in markets like India and China. Now we're in a situation where fundamentally growth as well as innovation is happening in the core markets we're in. As a result of that, I think we've managed to grow very quickly. Really we are participating on this intersection between technology and growth markets, right? That's what Prosus fundamentally does. If you combine those two, you see very, very strong growth rates. What you see here is our e-commerce businesses' growth rates.
That excludes Tencent and Mail, but it's just our core operating segments that you'll see today. Growth rates and revenue, it's benchmarked to the top 10 consumer internet companies in the world, the top 10 European internet companies, and to the S&P to give you an idea. Actually, on all dimensions, Prosus has outgrown these benchmarks. The more important thing is that, I think if you look structurally at how we're positioned on this intersection between technology and growth markets, we think we can continue this going forward. What is our approach? What is our strategy to invest on this intersection between two structural factors of growth? I'll say a little bit more about strategy, but before I do that, I want to just say a little bit about the organization we are, the kind of company we are.
Hopefully you'll get a flavor today if you don't have it yet. We are, as an organization, actually very nimble. The people who are in the core of Prosus, it's a small group of people. We are very externally focused. We travel a lot, we travel continuously, and we spend our time meeting companies, looking at the world, and trying to understand what's going on. We are therefore able, because we're small, to operate very quickly, to be nimble, and to decide very, very quickly. We are a very responsible investor, and we are very rapid. When things change fundamentally in the world, we can actually adjust very quickly to what is required. What do we do? What is the what of our strategy? Fundamentally, what we do is we partner with entrepreneurs to build global technology leaders.
What we care about is technology that addresses a fundamental societal need. As I said before, we invest for the long term, so we look for fundamental needs where technology can play a structural role in improving people's lives. We like growth. We are a growth-oriented company, and I think it's important to clarify, we're not necessarily an emerging markets company, but we're a growth company. When we see a tremendous growth opportunity in a mature market, we'll take it as well, right? We've invested in Europe, we've invested in the U.S., in models that we think are high growth, even if the markets are a bit more mature. Growth, we always look for. The other thing we consistently look for is sustainable leadership positions. We know that leadership positions fundamentally drive outsized returns, and that's what we're gunning for.
Not for temporary leadership, but for long-term structural leadership with customers. At the bottom of the slide, I think it's worth pausing on, I spoke about the what of our strategy. It's also very important, what is the how? How do we do this? As a group, when it comes to investing, we're a very, very active investor. We're an operator as well, right? We have about 20,000 people who work for companies that we control and operate. Also when we invest, we bring that operating capability to bear. We're very hands-on. We help companies with strategy, we help them with AI, we help them with mobile marketing, and we bring a whole lot more than money to the table. We're a focused investor as well. Basil actually, when he closes today, he'll show that very clearly.
If you look where we spend our money, it's very much in the core segments that we understand particularly well. We're not in the business of spray and pray, right? We don't do lots and lots of different things at scale. We do things at scale when we have a deep understanding of the business model that we're investing in, when we know we can get a good return. As I said before, we're long-term focused. We don't flip companies, right? If we see the potential of a company, we can be invested for 10 years, 20 years, 30 years, right? We've done that in the past, and we'll continue to do that. It's actually a tremendous strength. If you think about the classifieds business that we've built, that is a business that requires a seven, eight-year investment cycle.
If you're a short-term investor, you would just never, ever invest in these businesses. We have done that. Now we have the largest and a profitable business with the OLX Group. We're disciplined. As a group, we've been, I think, very, very consistent in we do take risk, right? I think we wouldn't be here today if we didn't take risk. If you operate in technology and in growth markets, you always take risk. If you look where we place our bigger bets, it's actually in businesses we know extremely well. You see smaller bets we make on new business models, but our bigger investments are always in business models where we have a tremendous amount of operating experience where we know what we're doing. We're disciplined.
Finally, again, I hope you hear more about that today from everybody, is we are a responsible corporate citizen. We care deeply about our customers. We know, I know that there's only one way to build a successful business over time, is to make your customers fundamentally better off all the time. I think that extends beyond customers. I think you can only be successful as a company if you take responsibility for all your stakeholders around you. This sounds good. What did it get us so far? It got us actually an amazing track record of strong returns. If you look at our total portfolio, and this is based on analyst valuations, we have over the last 17 years, delivered an IRR of 38%, which is nothing that we shouldn't be proud of, I suppose.
That includes Tencent, which is obviously one of the most phenomenal investments ever done. Even if you take out the Tencent investment over the current portfolio of internet assets over the last decade, we've delivered a 20% return, which is something we're very proud of. More importantly, we're delivering this return at scale, and we're investing to keep doing it this way. Let me talk a little bit about where we go from here. I think I've said it before, but it's important to repeat the message. Just based on our company being on the intersection between technology and growth markets, we're in a structurally good position to grow. I think that's fundamental to our strategy. Besides that, if you look at our portfolio, we have a number of priorities that we care about.
We want to build all our core operating segments to profitability while keeping growth at above market levels. I hope the plans you'll hear from the operators today will convince you that they are actually going to deliver that. We don't just want to keep the business we have today, but actually expand those core segments into real ecosystems. We know that customers like it when you give them a broader ecosystem that delivers value for them. We also know that those businesses are more sustainable, and again, everybody will touch upon that today. We will continue to do selective M&A. We have M&A as a muscle. We've done it for a long time. We know how to do it well, and we will drive consolidation when it makes sense in the segments that we're in.
We also selectively invest in next-generation models when we think it can be the future of the group, as we've done for many years. If I look across the segments, there's a number of priorities again, and you'll hear all of them come back when you hear the operators speak today. We want to make sure we put AI into production mode. We have been investing in AI and in data scientists for a number of years now. We have some of the best in the world that work for our group. There's actually some of them out there, so please do talk to them. They're amazing people. We've gotten better at actually implementing and embedding AI in everything we do. I think that is actually going to be on everybody's agenda today and watch out for it and ask questions about it.
To be successful as that, we have to be a data-first company. Unless you have structured and labeled data, AI is meaningless. We are going to invest, as a group, in making sure we have the best data infrastructure in the world. Again, I think when I look at where the world is going, and it's not just Europe, but it's everywhere around the world, we are very aware that our success is going to be dependent on making the world around us successful. All our stakeholders, all the markets we're in, we got to be responsible. We got to get ahead of regulation rather than be regulated on the back foot. That is our set of priorities. Again, I think that is probably a good start for today.
Before I wrap up, there were a few things that I think I could highlight because you're going to hear them more often today, and they're going to be, if you will, the thread. First of all, I said today, there's a tremendous amount of growth in technology. There's growth in markets, and more importantly, increasingly, you'll see innovation happen in the kind of markets we're in rather than in the West. You see a lot of examples there today. They're exciting. I hope you enjoy it. The second key point is winning positions and getting to scale drive profitability. We've seen that with Classifieds. We see that with core payments. I think we'll see that in all our businesses. Getting to a winning position, getting to scale is at the core of financial success.
Actually, if you then build an ecosystem around it, you also build a strong moat for the long-term future of that business. I think finally, again, as a group, we've existed for quite a while, and one of the things that I realized, if you want to continue to be successful, you got to change. You got to be at the next forefront every single time. When the world changed from fixed line internet to mobile internet, we pushed our companies really, really hard on making that transition and making that transition a success. I think we're in a similar transition to a machine learning first world. We're pushing our companies very, very hard to make that, again, a source of competitive advantage rather than something where you can get left behind and actually erode value over time.
With that, you're going to be rid of me for a few hours, but not entirely. I'm going to be back at the end of the day for a long Q&A with Basil. I think we have about 45 minutes towards the end of the day. Right after I go offstage, I'll show you a video, and then Martin is going to come and present Classifieds. See you later. I enjoyed having you all here. Thanks.
[Presentation]
[Presentation]
Good morning. My name is Martin Scheepbouwer. I'm delighted to speak to you about the OLX Group, the classifieds arm of Prosus. I hope you've been able to see in the video that our true purpose is to promote and then facilitate smarter consumption. Smarter consumption has obvious economic benefits for all around, all involved. It also makes this world a better place. Every time a transaction happens over one of our platforms, that's an item that doesn't have to be recycled. Another item doesn't have to be produced. By just executing on our business model, we make a very positive contribution to our environment. When we calculated this effect by just looking at one of our larger categories, electronics, the impact is already very significant and vastly outweighs organizational cost.
I feel very proud to work at a company that makes such positive contributions to society. That fits right into the heart of Prosus' investment philosophy, as Bob already mentioned, and we like to address fundamental societal needs. Trade has been around as long as humanity, and we started calling it classifieds when some of it moved to newspapers in the 20th century. Oddly enough, we stuck with that name, but it essentially moved online and then to mobile about five years ago. With the move to mobile, also, the rate of change, the degree of competition, all intensified. The way we navigate this change is to go beyond generic classified platforms to facilitate transactions. Today's footprint is a large one.
We operate through three main brands, Avito, OLX, and letgo, in 30 markets around the world, serving more than 300 million customers every month, and leading positions in 27 of these 30 markets. Well, not only are we large, but we also grow fast. This is a picture that shows our revenue growth in comparison to our industry peers, whether they are global portfolio companies or single-country vertical classifieds platforms. We've done well in that respect. By no means do we think that the growth is over. If we take today's revenues and extrapolate with the more we can do in our mature positions in terms of extra products and services, and just take the expected rise of smartphone penetration in our scalable markets, there should be scope for a lot of growth going forward.
We are where we are by following the Prosus investment playbook, as Bob laid out for you earlier. Let me tell you how that applies to classifieds. About 10 years ago, we took minority positions, mostly backing local entrepreneurs in classifieds in promising markets. Well, some of them worked out, some didn't, but the ones we were able to take to leadership positions, we then subsequently brought together to form a global operating company, thereby capturing operational synergies, and building a sustainable and ultimately profitable company, a phase we finished when we became profitable last fiscal year. Going forward, we plan to take this model to a level deeper and closer to the transaction by offering a vast array of products and services that span both on and offline transactions. Well, none of this would have been possible without an excellent team.
If I take my top team, not only are they excellent leaders, but they also have a boatload of industry experience, whether it is in broader consumer internet or specifically in online classifieds. With me today here is Lydia, our CFO. I hope you can direct at her the most difficult questions. The real heroes, I would say, of our team are the 5,000 who work in one of our 30 local offices, because we believe they are essential to the business model delivery. The way people buy and sell generic items is more or less the same the world over. If we want to become truly relevant locally and work with professionals and allocate parts of their budgets, we have to adapt to the local circumstances and integrate with many of the local systems and processes. That's what these boys and girls do.
Where they sit, they have responsibility for marketing and commercial activities, and in many cases also have local product development at their disposal. Although I know that many of you are well-versed in classifieds, for those of you who are not, let me take you through a brief primer on our business model. At the heart of what we do is what we call a horizontal platform. That is essentially a website and increasingly, mobile apps that allow people to buy or sell more or less anything. Typically, these people are consumers like you and me. A use case could be you want to sell your bike because you bought a new one, then you go to OLX or to Avito to do so. You want to buy a secondhand phone for one of your children. Well, OLX is the place to go.
A typical transaction takes place offline by people meeting to exchange the item for cash. One of the beauties of this model is that very few people pay us anything. That means that for most consumers, this almost is like a utility, something that's always there, and you can use for free to create economic benefit. There are ways to make money from a horizontal platform. We work with professionals, high volume sellers. They typically insert for a fee. We offer optional extra exposure features to sell faster, for instance. They are paid. We also run limited third-party ad campaigns around our own content. You might have heard about verticals. Verticals are platforms that address one category more deeply and on a more granular level, mostly in cars, property, and jobs.
They're typically desktop-centered, and they are the right place to go if you are a consumer, say, looking for a very specific Volkswagen Beetle 1978, red, 1.6 engine. A vertical might be the best place for you to start. These verticals we also use as a commercial gateway towards professionals because they typically offer the professional environment they like and also come with lots of the tools that allow them to manage their budgets in an efficient manner. In several countries, we run both horizontal and vertical platforms alongside, and that makes for very effective bundling. Here's an example from Poland, where we have a cars category both on OLX and on Otomoto, a dedicated car vertical.
We go to car dealers and say, Well, hey, if you would like maximum exposure for your ads, consider taking a bundle where you're both on Otomoto and on OLX. You get more leads and can therefore sell higher volumes and faster. Towards consumers, we tend to then aggregate all this content in a single search result on OLX, which allows consumers to see all available content in one place. We run a global business, 30 markets, but let's zoom in on, let's say, on the top 10. These top 10 markets, they comprise an internet population of around 1.5 billion, and we're present in several of the markets that Bob showed you earlier. We play to win.
We like to have, or we aim to have, at least number one or two position in one of the key verticals of cars, property, and goods. As you see here, we have those positions in our top 10 markets. Zooming in further to the top three markets. These are Russia, where we're called Avito, Poland, called OLX, and Brazil, also OLX. These metrics are staggering. If you look at Russia first, trade volumes, so user metrics around trade, growing more than 20%, although Avito is already more than 10 years old. Revenue is growing even faster, and that all at more than 50% profitability. Very strong numbers there. Similar story in Poland. It's also an old and matured and established platform, but still growing user metrics very healthily. Revenue growth of 40%, and again, at more than 50% profitability.
Brazil, earlier in the life cycle, but growing user metrics steadily, monetizing increasingly, as you can see here in the growth of paying listers, which drove revenue growth and the first profitable year last fiscal year. The free cash flows from our top markets allow us to reinvest in growth elsewhere when we see an opportunity. The last couple of years it has been, for instance, letgo U.S., India, or more recently, convenient transaction standard businesses. As you can see here, the balance between these two has become much better over the last couple of years, driven by further expanding our mature markets and reducing the, let's say, the development spend in immature markets, especially letgo U.S., which implies that we'll be free cash flow positive pretty soon. I mentioned letgo U.S. a few times, so let me update you on where that stands.
The U.S. is the largest market for classifieds by a stretch. In that huge market, Letgo has established its position as one of the, let's say, the contenders for the horizontal space that has been able to keep its ground, hold its ground amidst peers like Craigslist and OfferUp, while we have been able to take up revenues and reduce marketing spend over the last few years. Going forward, I expect the U.S. to remain fiercely competitive. It's a market where also Facebook has a well-working solution, and every category of trade has several very strong contenders. Based on this position and these numbers, I'm very confident that Letgo will be able to reach profitability in the next few years and generate a healthy return for us. I talk to you about horizontals, verticals, mature, immature. You might ask, Hey, are these all the same?
Will they all grow up to be the same type of companies financially? Well, they're not. On the top end, we have what we call mature positions in developed markets for classifieds, like Russia and Poland, that's still growing double-digit at very high margin. Awesome businesses. Another awesome business is at the other end of the spectrum, which we call convenient transactions, that typically entail a commission on a transaction facilitated. We buy a car from a consumer seller, keep it on our books for a short while before we resell it, and in that case, we have to take the sales value of the car as revenues. That means that the commission earned is a much smaller part of revenues than you typically see in, let's say, in Russia or in Poland on average.
As the largest part of our revenue growth will come from that convenient transaction segment, I also expect a blended margin profile to change over time. Well, by now, I hope you agree with me that 10 years of hard work has given us a strong business also financially. We have a large and engaged and growing audience that we have been able to monetize better at the same time, which has driven a fast revenue growth over the last few years. Just first half of this fiscal year 2020, we had almost the same amount of revenues as the full year 2018. We became profitable last year on the back of this revenue growth, plus operating more efficiently. The first half of this year exceeded more than EUR 40 million in profitability. That was quite a milestone for me and my team.
We never sit still. We're never complacent. In fact, we're quite paranoid, and only the paranoid survive in the long run, I've learned. We continuously evaluate what we can do to stay successful in the future. I believe it's about execution on three key success factors. Number one, the ability to consolidate technology into fewer but stronger and more scalable platforms. We are in the final stage of combining all our OLX Group platforms in Latin America, Africa, and Asia under one roof, something we call Panamera. With that larger and more scalable platform, we can innovate faster, and deliver a better user experience to customers that are demanding ever more. Ever more personalization, speed, better user interface, omni-channel experience, and so on. With Panamera, we're able to give that to everyone in those regions in a much better fashion.
From migrations in India and elsewhere, as you can see here by the engagement metrics, we're confident that this is the right starting point for the next phase. Success factor number two. As Basil said, we like to be machine learning and artificial intelligence driven. We like data to speak so we can transform the quality of our products. Data-driven products can really improve the user experience all along the classifieds journey. Let me give you two examples. Naturally, one of the tasks of a classifieds platform is to match content to buyers. As an industry, we used to do that mostly through browsing. So to the flea market experience, I call that, where we show more or less random content to you based on where you are. That's still a useful experience, and some people like that, but search has become more important.
As an industry and certainly also us, we were never really good at search. We've become much better at it over the last few years, driven by machine learning, because we know what successful buyers did to find the right item. That's a search path we can then show other buyers with suggested content and so on, and evidenced by conversions of visitors to buyers or visits to replies. This is working and gets better every day. Second example on this is content moderation. Obviously, when one works with lots of user-generated content, keeping platforms clean and safe is a key task. We look at every ad before it comes on, and it used to be a very tedious and expensive manual process.
Well, nowadays it's fully automated almost, underpinned by machine learning algorithms that were trained on data sets of accepted ads and rejected ads from the past, and that get smarter and better with new ad insertions every day, to the point that it makes the user experience much safer and our cost much lower. Third success factor, the ability to deliver on a transaction-based ecosystem. What do I mean by that? C2C trade will always be at the heart of what we do. We have and will increasingly verticalize along the key categories of cars, goods, property, and jobs. Verticalization all the way up to transaction facilitation, where often the real customer pain points lie. Let me give you a few examples.
Russia being a vast country and with the penetration that Avito has, it's difficult for every buyer and seller to meet in person to exchange the item. That's why we've developed a safe and secure and convenient pay and ship solution that allows sellers to ship the item with one of our partners to the buyer, and for the buyer to pay us money, which we keep in escrow, only gets released when the item arrives. That's a good example of how we can help solve a very tangible and practical issue on the ground. Also in Russia, we've made an enormous difference in improving trust in the secondhand car trade. That's a category that had low trust around the world and also in Russia. Now we offer a car history report to prospective buyers attached to the, let's say, the vehicle on the website.
What this allows to do is that you can buy safely from the seller active on Avito without having to bring your own mechanic to check the quality of the car. This is becoming rapidly the market standard, and it's based on proprietary data from the car industry. That's also something that will be hard for others to copy. Third example in this context is the recruitment services we offer in India through an investee company called Aasaanjobs. There are many websites that offer recruiters the ability to post and generate responses. What Aasaanjobs does uniquely is they qualify those leads and help candidates through the process to make the work of recruiters much more effective and efficient. Probably the best example of what we've done around transaction facilitation is the Frontier Car Group, what we call FCG.
We saw the potential of this model about two years ago. What FCG does in essence is it has 356 inspection centers around the world where they invite people who want to sell their car to have it inspected. They make a quote for that car, and you can sell it on the spot to FCG, that then later resells it to a dealer. That solves a lot of hassle for people who want to get rid of their car quickly, safely, and transparently. We made a minority investment into FCG about one and a half years ago, and since then, two things have happened. First, they have exceeded widely our expectations. Secondly, we started to think of, hey, what are the great things we can do together if we were fully aligned?
Imagine somebody in Colombia wants to sell his car and then buy a new one. On the old days, we could offer that person a free ad on OLX. That's pretty much it. We would not hear from him afterwards. Going forward, we can offer this person an inspection at one of our inspection centers, then either buy the car directly from him or offer a listing on OLX with the inspection report attached for trust towards buyers. After the person sold the car, we can then offer our help to find a new car from the verified cars on OLX, and that's an excellent moment to then offer financing, insurance, or title deed transfer, all against a fee that this person will be delighted to pay because we solved a real issue.
Based on this, we decided to increase our investment with FCG, and we have an tender offer to get roughly up to 80%, pending regulatory approval. I hope that deal to close in the next couple of weeks. Technology, platform consolidation, machine learning, convenient transactions, how does it all come together in a market you know? Well, let me give you two examples. The first one from Poland. In Poland, we're huge. Almost 2/3 of the internet users in Poland uses one of our platforms every month. That gives us a very solid base to expand from. OLX itself is one of our best horizontals that already addresses the key categories quite well. It also allowed us to launch vertical, let's say, category killers in the areas of cars, houses, jobs, services, and heavy machinery.
Well, three of these, especially cars, jobs, and services, already facilitate transactions in a meaningful way. You can imagine that this ecosystem of horizontal and verticals touches consumers in many different ways and moments, which make this business more defensible and creates lots of opportunities for monetization. Second example, India. Earlier market, naturally than Poland. We are there, I would say, a big fish in a small pond. If you look at the higher income segment that is comfortable working in English, has a fancy smartphone, has a car, has things to sell, has been on the internet for a long time, that's a segment that we are penetrated in quite well. They know us, they use us, that underpins the financials we have there today. We'd like to do more with them going forward.
On the other hand, we also want to become more relevant for the few 100 million new internet users in India that consume internet in a different way. We might not be able to address them in English, and they might want to have a more video-centric experience. If I look at the ecosystem potential in India, I get really excited. We already have a thriving car business. More than 70% of all used car transactions in India happen over OLX today. We have 15,000 paying dealers who are happy listing on OLX because we generate truckload of leads for them. On the back of that position, we extended our offering last year with the help of FCG to also introduce the direct purchasing model in India, called OLX Cash My Car, and that took off like a rocket.
I look forward to further building that offer out when we have control over FCG very soon. In closing, we're proud of the business we've built, and I hope you agree with me that the OLX Group is a magnificent company. We have a large, engaged, and still growing audience that we've been able to monetize increasingly well, resulting in far over $1 billion in revenue this year. Most importantly, we've been able to increase our free cash flows from profitable entities, which gives us immense firepower to reinvest in growth areas where we see opportunities. This free cash flow growth will also sustain increased value creation.
We have a solid track record of executing on our long-term plans, and if we can execute on the plan that I showed you today, we believe we can grow the value of the OLX Group from around $12 billion today to up to $20 billion in five to seven years' time. By simply expanding the mature markets, as I've shown, by bringing the immature markets to full potential by scaling them up, and thirdly, by offering a suite of transaction-oriented services by deepening our platforms. All of this will be underpinned by a thriving customer base that uses our safe and convenient online services to buy and sell any time, any place, anywhere. That's it for me. I'd love to take your questions. Thank you.
Hi, it's Will Packer from Exane BNP Paribas. Three questions, if I may. Firstly, you talked about the potential to verticalize your business in certain geographies where that's nascent. You have some quite powerful incumbents, in contrast perhaps to some of the other markets where verticalization has worked. To what extent can you verticalize organically versus via pursuing M&A? Secondly, Frontier Car Group is growing incredibly quickly. Could you just talk us through the unit economics in those regions where perhaps it's a bit more mature, because it is loss-making at this stage? Lastly, there's a lot of talk around consolidation of classifieds or consolidation as a part of the Prosus strategy more widely. Could you talk to the synergies that you think can be achieved in the classified segment? Are those synergies focused on less mature markets, or can you generate synergies in more mature markets?
All right. Well, thank you for all your questions. I hope I remember them correctly. The first one is about verticalizing in competitive areas, right? Yeah. The first thing I would say is that we don't verticalize out of nothing. The only, let's say, what I would call naked vertical, standalone verticals we have are in South Africa. Everywhere else, when we verticalize, do that off the back of strong momentum and brand recall of OLX, which gives us a tremendous advantage. Having said that, I don't believe the FCG model, for instance, is a winner takes all. Nor does it have to be in order to build a handsome business. Yeah, as I said, the assets we built it from are very strong and give us an immense advantage and head start over everyone else. The second one was unit economics of FCG, right?
Yeah.
As I mentioned in my presentation, the way this works is that we buy a car from a consumer, let's say for EUR 100. We sell it for EUR 105 to a dealer, and that means EUR 105 is revenues, and the EUR 5 commission we earn is our gross margin. Then we have to pay the cost of the inspection center and marketing, everything else. That means that this model is only profitable at scale. Initially, this cost money and capital to set up inspection centers and hire people and so on. It's a much asset-heavier operation than online classifieds as we knew it 10 years ago was. The reason we love the model is that it addresses real customer issues around the transaction. It's not transparent in Nigeria or in Chile what the price of a car is.
It's not safe to transact a car in many of these places. It's certainly not convenient. It addresses fundamental customer problems, which allow us to monetize. How exactly we'll monetize is something we'll have to iterate on a bit. There's the basic commission we can earn on a transaction. I'm most passionate about actually not earning money on transaction at all, to make us just a traffic builder, and then make the money on, for instance, the car loan and the insurance and the title deed transfer and so on. I actually believe that the gross margin and profit margin potential are significant. How much? That's a bit speculative. The third one was about consolidation classifieds, right? Could you be a bit more specific what you had in mind?
Sure. I suppose the key driver of consolidation will be the value you can create in consolidating, which would be reliant on driving synergies. Are synergies a story focused on the nascent market, or can you drive synergies in more mature markets where there's already been healthy technological investment?
Yeah. There are scale advantages in classifieds, no doubt. I mentioned it a few times. I think the days when one could meet customer expectations around user interface, personalization, speed, omni-channel, et cetera, with a small team in one market, those days are over. It does mean that to keep up with the world, you need scale. To do all of this with a few people is impossible, I believe. There are scale advantages, and we are reaping them organically by combining our platforms. We used to have more than 12 horizontal platforms, and soon we'll have basically three main ones. To build with a competitor, or with, let's say, another company classified industry is not so straightforward.
One can combine technology, and that means that longer term there are scale advantages, but it is operationally very heavy. If I look at our agenda to consolidate our own, to make us more data-driven, and to deepen the platforms, I want to be careful that we can execute on this without being distracted, trying to merge with somebody who is way behind. I think that's the way I would summarize our position. Having said that, the industrial logic is there, and that makes it part of my job to evaluate whether we build or buy.
Thanks.
Can I go? Hi, Masha Kahn from HSBC. I've got a couple questions. You mentioned profitability of convenient transactions at scale, 10%-15%. Are we talking about gross revenues or net revenues, and what sort of peer comps is it based off? If we could clarify that would be great. The second question, you showed classified business worth EUR 12 billion today. Can you give us a sense what it was worth two years ago at Investor Day in 2017 when you showed 15% IRR two years ago, 20% IRR this year, where the 500 basis points of delta came from? Thank you.
Yeah. Back to your first question. Basil will address the second question afterwards, no? Or would you like to do that-
My presentation.
your presentation. Yeah. If you can hold your second question for Basil. I think the first one is, as I just mentioned. The basic gross margin comes from, let's say, buying and then selling of cars primarily. There's also something in jobs and otherwise, but that is relatively small at this stage. That's a low profitability activity. There's an enormous opportunity to increase the profitability of convenient transactions by offering additional products and services that often come at much higher profitability. If we offer a car loan, let's say, on commission basis, let's say somebody wants to finance a new car for 70%, and we can offer that loan on a commission level, that means the profitability of that transaction increases massively. That's what we're looking for. I can't give you a sort of guidance on what profitability levels will be five years out.
What I'm confident on is that this is a business to last, because it solves real customer needs in markets that we care about. That B, that we can make a small profit on the transaction itself, and (c) that it has tremendous up and cross-sell opportunities that are expected much more profitable than transaction itself. Those we have to grow and iterate into.
Martin, I'm sorry, I'm still not clear. It's not working. I'm still not clear. The 10%-15% margin that you quoted, is that based on gross revenue or net revenue? How should we think about it?
10%-15% is what the best-in-class companies do today. WeBuyCars in South Africa has a 10%-15% gross margin. That means they make.
Gross margin
10%-15%, let's say, by flipping cars.
Thank you.
Yeah. Who's next? Over there.
Hi, Pamela Macedo from LGM Investments. I've got two questions. You showed a chart of the evolution of the classifieds business model over time. I was just wondering, especially in the horizontal platform space, how much of a risk do you think social media platforms like Facebook are to the future of the classifieds business model? Also, when you talk about your verticalization strategy, how much of a right to win do you think that a vertical backed by a horizontal player has in competing with a pure vertical platform? If I look at Australia and U.K., you've got clear winners like carsales and Rightmove and Auto trader who have built strong positions.
When you look about going into verticalizing your horizontal platforms, are you looking at markets where there is no clear winner in the vertical space, or do you think you have the right to win against an established vertical platform?
All right. Well, thank you for those questions. The first one is around, how do we compete against the Facebook and other sort of social classifieds models? Well, let me try to put it in a box for you. Overall, our belief is that offering the same type of experience that Facebook offers at smaller scale, that is a road to nowhere. That is not something we do. We believe that for our platforms to be relevant next to Facebook, they need to be deeper and facilitate transactions and solve real user needs that Facebook doesn't. Having said that, the impact of Facebook varies widely around the world, there is no meaningful trade on Facebook in Russia or in India or in most of Western Europe that we're active in. That might come.
Where Facebook is large is in the U.S., in Latin America, and Indonesia, for instance. Hence our strategy, our plan, to not sit still, but to continue to innovate, deepen the platform, move to transaction, integrate FCG, and offer a package that I don't believe Facebook will offer anytime soon. Then, I think your second question was around our right to play in verticals in competitive markets. Well, are you from the U.K. or Yeah. Well, I would say that the comforting thought is that the strength of U.K. verticals is unmatched anywhere else. That there is no Auto Trader UK anywhere else in the world. It doesn't exist. Same thing for Rightmove. Most of our markets are more, let's say, it's more competitive. There's no such incumbent with that market power we're fighting against.
If I take, for instance, the Russian market, Avito is strong with a verticalized offer on the horizontal. There is a strong competitor in cars, Auto.ru, that we fight on more or less equal terms. We are better in some places, they're better in some other places. That's a market share battle. If I take another example, let's say, in Portugal, we have OLX plus two verticals, or they each have a competitor in that space, but that is something that we believe we can win in many cases because of the strength of the horizontal, the scale of our team, which is often larger and can innovate faster than local competitors. The capital we have at our disposal, flowing from the profitable entities, as I showed you.
Yeah, there's some cases will be a competitive battle, but we look forward to that because I think we can handle that. There's a third category of markets where there frankly is no vertical winner at all. If we go to, let's say, we go to Colombia, or we go to Indonesia, or we go to Egypt, this is still very early. It might be the same as the U.K. 20 years ago. That's an area where, with our starting position and along this plan, we actually are at probably have a head start compared to everyone else. Yes.
Hi, Martin. Sharat Dua from Fiera Capital. Just following up on the Frontier Car and convenient transactions, a couple of questions I had there. Are you currently offering these value-added services, the consumer lending and insurance and so on, in this example that you talked about? Also, if you could help us understand the types of convenient transaction and economics outside of autos or what else are you doing in that space? Is this not fundamentally just cannibalizing the existing classifieds business that you have in those products?
Well, thank you for those questions. Let me start with the last one. Absolutely not. These are all additional opportunities as per my example from Colombia, where a free ad is now replaced with services that we previously didn't offer at a handsome fee. Yes, we do offer car lending in several locations. It's still early. Yesterday actually, over the weekend, we approved the first car loan in Poland. We have a car loan facility in Chile, for instance, with FCG. That is starting, and I hope to give you more results about that next time. I think we are out of time. Is there room for one last question? Yeah, one last question. Lady in front here.
Thank you. Good morning. It is Silvia Cuneo from Deutsche Bank. From the presentation, it is clear what you are doing is mostly in the direction of improving the consumer experience. What about the product improvement for your professional customers who are actually those you monetize? The question is, what type of premium products do you offer in addition to basic listing?
Well, thank you for that question. As you say, I rightly point out, many of our bills today are paid by professionals, and we work closely with them to give them an ever better experience. For example, when we work with car dealers, we have tools to measure, let's say, the impact of the bridges they allocate to one of our platforms to make that ever more efficiently, and that work will continue. If we take a look, for instance, at some of the transaction services of delivery or instant car purchase, that is in most cases in collaboration with professionals. Car dealers in India are supply constrained. If we can give them more cars to buy, they're happy. A delivery in many places can also be used by business sellers, who then can deliver an item somewhere where they otherwise wouldn't be able to reach.
Our business customers are happy with us. I think I need to stop here. I will be around, Aline will be around for breaks and lunch, I'm happy to take more questions. Our next agenda item is Laurent Le Moal from Payments and Fintech. Before we do that, we thought you might be hungry and need a bit of a sugar boost. We have for you what's called a stroopwafel. It's hard to pronounce by non-Dutch people. They tend to say stroopwafel, it is stroopwafel, I'm delighted to say that we have fresh supplies coming in. Please pass them along, I hope you enjoy them. Good. Thank you.
Hello. Hello. Good morning to all of you. I see a lot of happy faces, so that must be good. Or maybe you're just very happy because we're going to talk about payments. Well, in fact, for many years, payments was really seen just as a very boring piece of financial plumbing, actually. So dull that even the banks didn't want to do it. Recently, payments have been all over the news, really, making headlines all around the world. You've read about the big wave of consolidation happening in mature markets as players try to get to scale very quickly. You've seen also the industry looking towards east for growth and innovation. When we say east, we're not just talking about China, but also India. Meanwhile, the big tech companies are releasing their own financial products to their huge consumer base.
Finally, 10 years after the Bitcoin white paper was released initially 10 years ago, the Libra Association was created, really shaking up all the central bankers, which is not easy around the world. Exciting times, actually. Much for being boring plumbing, right? My plan for today really is to help you get a better understanding of what we do, where we play, and how we compete in this very dynamic industry. Look also at the trends that are shaping up our markets and how we transform these trends into opportunities for ourselves. Share with you our plans going forward. What do we do exactly? To put it simply, we connect consumers and merchants. We enable consumers to pay with whatever payment method they like. We enable merchants to collect and manage the payments. That's very easy. There's nothing new there.
Many companies have done that for many years. Except that now we live in a world where most of the internet users are coming from developing high growth markets, and that's where we play. That's where we focus. We are in 20 of these markets.
In these markets, accepting Visa and Mastercard is just not enough. Only three out of 10 transactions in these markets are done with Visa and Mastercard. All the rest, a lot of payment options that you don't even know about. That's the big difference really that is happening in digital payments. Where do we play? For the people, for those of you who know about the payments industry, we are an acquirer and a payment gateway. For those of you who don't know anything about the payments industry, well, you will recognize yourself as the consumer, right? If you look at how the money flows from consumer to merchants, there's actually a lot of people involved.
What we do is basically pass the information back and forth from the consumer to the merchants, enable the transaction, take a cut of that transaction, and we sell our services to the merchants. We are basically the glue between all of these guys, right? We don't compete with the wallets. In fact, we integrate all of the wallets in our gateway. We don't compete with the networks. In fact, we use the rails of the networks for our transactions. They become our supplier. We don't compete with the banks. We facilitate payments from bank accounts. In fact, we also manage critical parts of the payment infrastructure of the banks. Of course, we compete with other gateways, but even there, we start to partner more and more with them. The reason is simple.
There is not one global company that can offer you the breadth and depth of all payment methods in every country in the world. The payments industry, it's actually a giant mashup of solutions. What we offer is the last mile connection. How big is the opportunity first? Here again, the revenue pool of the payments industry is actually enormous, right? We are talking EUR 1 trillion here of revenue pool. A couple of things on that. These are all payments, and not everything is addressable. These are online payments. These are offline payments. These are all the different markets. Here, what is important is to remember that first, this is not a winner-takes-all market at all. The second thing is that you need to be extremely focused when you operate in this market.
For us, it's all about operating in high growth markets, emerging markets, and providing access to local payment methods. That's where we play for all online and mobile transactions. Look still at this number, EUR 800 billion. That's the incremental growth of revenues happening in the payments industry. Let's spend a bit of time understanding what is driving this growth, what are the trends, and how we transform that into opportunities. There are four big things really happening to make it simple. The first one is the shift from cash to digital. Actually, we are doing pretty well here in Europe. I think Sweden is going to become probably the first cashless country in the world. Actually, what is important is that the growth of digital payments is happening from emerging markets. Look at the top 10 fastest countries in terms of growth of digital payments. Okay?
You will see how similar it is from the slide that Bob presented just a bit earlier before. These are the same countries. There is a direct correlation actually between GDP growth and digital payments, and vice versa. Here, the second thing you see is how India and China are top of the list. I've been in payments for 15 years now, really. What is astonishing in this market is the speed. We are doing well in Europe for digital payments, it has taken a generation to get there. Actually, in this country, it has taken just a few years. Take the example of India, fascinating market, our biggest market. This is where I spend most of my time.
Look here, in just a matter of three, four years, digital payments came from less than half of all the transactions or of all payments transactions to 2/3. That's really remarkable. Maybe you've heard, a couple of years ago, how the Prime Minister Modi really mandated the use of digital cash for all consumers, actually banning the use of banknotes. That was quite radical. This was called demonetization. It was not just this. This was not just a top-down approach. What has worked incredibly well in India is actually the role of the government in creating a completely new platform. In fact, we always say with the team that the biggest disruptor in India is the government itself.
What has been done there is really create a new platform for payments, real-time payments called UPI, giving the possibility to all the Indian consumers to make a simple payment from their bank accounts. In Europe, it has taken more than 10 years to build what is called real-time faster payments. 10 years, okay? This was mandated in 2008. In India, it has taken 18 months to build the UPI platform, and the growth has been phenomenal. You see here, we are talking about a billion-plus of transactions, okay? From zero. That's quite remarkable. Just as a point of comparison, the whole of Apple Pay is less than 10 billion transactions in six years. That growth is remarkable. The second thing that is happening is actually you see how consumers are taking on digital payments, but the way they do it is that they actually leapfrog the card altogether.
Here you can see developed markets. People are quite happy using their cards. In their wallet or in their phone, you're still using your cards. If you look at high-growth markets, which are basically the markets where we are, India, Africa, Latin America, okay, and Southeast Asia now, actually, you see the card is only a small part of all the transactions. What's the rest? The industry, which is very card-centric, which is very U.S.-centric, used to call them alternative payment methods. Well, they are not so alternative at all when you have seven out of 10 transactions. These payment methods you see here, the local cards like the RuPay, for instance. Hundreds of millions of debit cards in India that you can only use in India. That's the limitation. Bank transfers, UPI, cash payments.
You go to Brazil, you have a very big payment method that is called Boleto. You print it, you go to a small shop, then you pay with cash, you transform that into digital money. Others. A lot of wallets. In fact, here you see a lot of American wallets, talk about the PhonePe, for instance, of India. These alternative payment methods, that's what people use in these markets, there are more and more of them. We have 300. We've added 50 new payment methods in the past 18 months only. What it means, it means that there is a huge fragmentation. Remember, in the payments industry, the more fragmentation there is, the better it is for us because we aggregate all of these payment methods, we basically simplify the life of the merchants.
Fragmentation of consumer payment methods is good, and it's actually driving up the volumes. The second thing it means, there is huge value in having local connectivity to actually get these payment methods directly on your platform. That's why a lot of other payments company actually come to us to use our own platform to offer these payment methods to their merchants. We've seen how payment methods become more fragmented, actually more local. At the same time, e-commerce is becoming more global. In spite of Trump. What it means here, what do I mean by cross-border? Cross-border is when, for instance, you have a small merchant in China selling through AliExpress to a consumer in Poland, or where you have Uber opening up their services in South Africa. These are real examples of merchants using our solutions.
Cross-border trade is the fastest-growing segment, actually, of e-commerce in the market, but also for us. By the way, it offers better economics. Cross-border, by definition, you also have effects, so we can start playing with that. The economics are much better. That's a huge opportunity. This is driven by all the big brands I've mentioned, the Airbnb, the AliExpress, the Booking, the Netflix. What we've started doing over the past two years is go directly to these merchants and offer them the ability to accept payments from local consumers. We also go through partners, indirectly. Adyen is actually one of the big partners of our business. We actually help Adyen serve their own merchants. To do that, we had to build a new solution, which is called the PayU Hub. It's like this gigantic magnet. What does it mean?
It means that basically, if you look at all the different platforms that we have, one for Europe, one for India, one for LATAM, one for Southeast Asia, and all the number of alternative payment methods there is. This is quite complex for a big merchant, even a big organization. Try to imagine, are you going to do integration with every one of them? No. Are you going to manage all the different reporting? No. Are you going to manage the fraud, the conversion? No. What you want is actually, and what we've built is actually a global layer that sits on top of our regional platforms. With this, we can surface to these big clients just one API. With one API, you can connect to all of these platforms, and then literally, you can flip the switch on accepting payments in Colombia, in Nigeria, or in India.
We try to offer the best of both worlds to merchants. We keep our local platforms. We keep the direct connections with local payment methods and the better conversion rates. We simplify the life of the merchant. The last thing is around data. It's not just specific to the payments industry, right? You've heard Martin talking about this. You've heard Bob talking about the importance of AI. Data used to be just a byproduct of the financial transaction, really. Actually, what is important is with all the transactions, and we've done 3 billion transactions over the past three years, we have a huge amount of data coming, right? This is quite valuable, because with this, you can start building up the financial profile of the consumers, what they do, what they spend.
Actually, the goal for us would be to have the 360 view of the consumer. We can use our own payment data, we can use the payment data also of our partners, other credit bureaus, merchants themselves, for instance. That's really the goal, for us to complete the whole view of the financial life of the consumers. The data itself is not enough. Actually, it's pretty useless if you don't have in-house the capabilities in machine learning or in artificial intelligence, actually, to make it useful. Just one big example. What happens if you couple data with machine learning capabilities? Well, you can reinvent credit, basically, right? Here I want to spend a few minutes just telling you the story of LazyPay. LazyPay, that's a product that we have built ourselves in India.
A couple of years ago, we bought a company in India called Citrus, and we asked the founder, actually, to stay and build a new product for us. That new product, what we saw as an opportunity, was the possibility to release in the market a buy now, pay later. The possibility for consumers in one click to do transactions on their phone, buy, then pay later, two weeks later. Small transactions, two weeks repayment cycle. A bit like Klarna did many years ago, but with an Indian flavor, basically. That's what we have replicated for India. We started building the product in the checkout. In fact, one of the first merchants was Swiggy. Thank you for that. We started to build the product purely for mobile, and we're starting to use the data to do the scoring of the consumers because it's a credit business.
Credit is all about understanding your consumer, the risk you're taking by giving money to that consumer, and how you're going to live with that. You build a product, you use the data, you build your credit models, you give money to people, and you have big losses. Then you push a new model the week after, and you get better and better and better. By the end of all of these pilots, what you have is a customer base of 1 million consumers, actually 96% repeat rate, and a huge amount of data that enable you to have built your own credit scoring machine. Basically, we have built a credit bureau, a credit product from scratch. If you're a bank, I mean, no way you're going to do this. First, because you target the consumers that you know, your own consumers.
The second thing is you make credit decisions using past credit history. What happens in a market like India, where most of the new Internet users, the middle class, is coming online, but they have no credit history? They have what we call a thin file. They have a job, they have money, they spend money, they have no credit history. De facto, they are kind of invisible. The opportunity here is to use the data that we have, the partnerships that we have with the merchants and other players, and reinvent credit in our markets. This has been proven to work at scale in a country like China. China was in the same situation 10 years ago. Who has really created the biggest opportunity? WeChat Pay, Alipay, for that matter, from scratch. That's what we want to do in India.
In fact, if you compare the two, same population, actually, India will be bigger than China. That one is a fact. Actually look at the difference between the two markets. Okay, there is a difference in GDP, granted. Look at the bureau coverage. Bureau coverage, this is not the Experian or the FICO of the world. These are Chinese companies built from scratch. These are the WeBank of this world. You see here in India, 20%. That is about the share of the population that have the little plastic card that is a credit card. All the rest, that is what we are going after. Just to recap, really, shift to digital payments, that is for the long term. Mostly coming from high-growth markets, that is good because we are in five of the top 10 markets. We are in the right market.
More and more consumer choices, perfect. Fragmentation is good for us. More complexity for the merchants, got it. That's a solution for us. Last, use your data. Invest in AI and reinvent credit. That's why we are truly bullish about the years to come. Let's look at our plans, really. Before we talk about the future, I want to spend one minute looking backwards, actually. Two years ago, with some of you, we had the first Investor Day. At that time, we presented our priorities and say, Hey, if we ever meet again, that's what I want to show. Well, there you go. The first one we said, the first priority was to get to scale quickly in that business. I just had joined by the time. We did our first acquisition. Get to scale, get that business to profitability. That's what we've done.
3x in terms of growth, in transaction payments volumes. Okay? Turn that business around to profitability. Growth, scale, efficiency, you get there. Second thing is actually two years ago, credit was not a dream, but was really just a very small pilot. Now we've got a million active consumers on a weekly basis. That's not bad at all. We are doing EUR 14 million of loan issuance a month. Sounds small, actually now we're ready to scale that. I'll show that to you later. The third one, we had just started to make investments. We've been very busy over the past two years. Actually beyond these big numbers, what is important to see is that 80% of our investments has been into our core business of payments. That's what we've done. Now, going forward, the good news is not everything is changing.
You've got a lot of animals there. The India opportunity. The big strategic focus for us is really to double down on India. Okay? How big can it be? Well, you've heard a lot from Martin, from Bob about the size of the economy. If you look at payments, we are talking about 1 trillion digital payments in the market. Digital payments mean people going to a shop, big shop, small shop, paying, but also people buying directly from their mobile. Online payments, that's what we do. All right? We believe actually we can grow faster than these numbers. The second thing is around digital lending. Digital lending means people who can take a credit on their mobile phone, okay, without having to visit any branch of a bank. That market has just started in India. We've built our own product.
We also invested in local startups to learn from them, to help them scale. That's the market we are going after. Again, as I said, we are bullish in this opportunity for the long term. There's been a lot of talks and articles about the potential slowing down of the India economy. The GDP is going to 5%. What's going to happen? If really you look at digital payments penetration and you compare that to a market like China, we believe that India is 10 years behind. We believe that the same forces will push it up. That's why we believe in the long term, this is the right market to double down. Okay? What is it that we're building? We started as a pure payment gateway. You go to merchants, you sell them a payment solution.
We've built in India the biggest payment gateway in the market for e-commerce. Okay. 99 out of the top 100 merchants are using our solution. I'll tell you later maybe which one is missing. For us, the game is actually to expand the addressable market and not just focus on e-commerce, but go into new segments, small, medium businesses, government, billing. These are segments as big as the e-commerce we are addressing today. We can really double. The second thing is consumer. We are a consumer company. The moment you start giving credit to consumers, you become the one establishing that relationship. Today is just the beginning. As I said, we are doing EUR 14 million a month of loan issuance, okay? 3x in one year, very good. We are ready to scale. To do that, we need to do two things.
The first one is we need to push even more distribution through merchants. You go to Flipkart, you go on Swiggy, you go to other merchants, and you see the little button like credit. That's what we do. The second thing is, in India, we are building a full credit stack, the full business. We acquire the consumer, we score the consumer, we underwrite the loan, we provision the loan, we manage the losses, the whole cycle. We build our own loan book. To build this, we're going to do co-lending also with the banks. The last part are the banks, in fact. One year ago, we bought a company in India called Wibmo. Very important company in the market because these guys manage all the payment transactions in terms of security and authentication.
When you buy something on your mobile in India, you still get an SMS, two-factor authentication. These are the guys doing that. Three billion transactions. All the transactions go through their platform, and all the banks in India, at least 65, use them. Okay? We bought them for two reasons. The first one, because we are becoming a critical partner to the banks. With that, we can start building our own white label payment platform for them. The second thing is because these guys actually manage also mobile money. HDFC, largest private bank in India. They have their own app for consumers doing mobile payments. This is running on their platform. The goal for us is to get this technology in-house, apply to ourselves, improve our conversion rates, for instance, but also start white labeling these platforms for other banks.
With merchants, consumers, and banks, this is the ecosystem that we are actually building. At the center of that, there will be data. Moving on. I've talked a lot about India, but we are in 19 other markets. The ambition here is to build the number one players for all these high-growth markets. How are we going to do that? Well, the first thing is local consolidation. I presented initially this big wave of consolidation. U.S. companies buying European companies. Maybe there will be no European companies left soon. That's not important. For us, in our markets, we can be the guys consolidating, actually, and going after opportunities. As I said, two years ago, we bought a company in India called Citrus. We bought them, fully integrated the platform, migrated the merchants, and got to scale very quickly.
Actually, we accelerated our growth by three years. We want to replicate that success and actually create a playbook in other markets. One example is iyzico. iyzico was one of the leading, actually, online gateway in Turkey. Turkey, one of the top five markets for digital payments, very important market for the long term. We just announced the acquisition of iyzico, here again, it's going to be about integrating, creating the synergies, getting to scale, and pushing efficiencies. We are always on the lookout for more companies like that. The second thing is around market expansion. If you really want to be the number one for growth markets, you've got to be in Southeast Asia. For us, what we decided to do is actually buy a company called Red Dot Payment. Red Dot, by definition, means Singapore, the Red Dot country.
We bought them actually seven, eight months ago, for two reasons. The first one is because these guys have done all the hard work of going across the region, around the region, and building all the local connectivity in Thailand, in the Philippines, in Malaysia, Indonesia. I mean, a lot of work. You just don't wake up and say, Hey, I'm going to go there. Takes years to do. We bought them for that local connectivity. The second reason is we bought them because they have a very specialized solution for hotel chains. The big hotels are using their solutions. Hotels, by definition, a lot of that is cross-border. The game for us and one of the synergies, actually, to take their solutions and start plugging this into India and into Europe and into Latam. Now we have really expanded our coverage.
Now we can go deeper. The last one is actually accelerate cross-border. Two years ago, cross-border was zero. Zero of our volumes as revenues. Today, still small. It's around 5% of our volumes, but it's 11% of our revenues. That's doubling. We started to build this PayU Hub, this global layer on top of our local platforms with a company based in Tel Aviv called ZOOZ. That's worked really well for us, for them, for our merchants. It has worked so well that, in fact, we realized that, well, we'd better own this piece of technology and actually bring in-house the team. We bought ZOOZ. We kept the team, of course, in Tel Aviv, and it becomes our innovation center for payments. Consolidation in the markets where we are, expansion into new markets and going deeper, then pushing even more cross-border.
This is how we're going to strengthen our position in all of our markets and actually accelerate our growth. Last one is in terms of investment. Look, as I said, 80% of the money we spent has been around our core business of payments. Citrus, Wibmo, ZOOZ, iyzico, Red Dot. When it comes to payments, we want to own them, we want to integrate them, we want to operate them. That's very simple. We can create synergies better than anyone else. In credit, actually, we've been very aggressive in funding companies like PaySense or Zest that are truly shaping up the credit market in India, and we've been able with them to follow them from round to round and help them scale. The last one is, look, fintech is not just payments and credit.
There's a lot of very good companies as well where we have strategic synergies. Sometimes they are one or two steps away from our core business. One example is Remitly, a U.S.-based company in Seattle started by two Amazon guys. They are the leader for digital remittances from the U.S. to India. From there, they went from the U.S. to Mexico and from the U.S. to the Philippines. We certainly can help them in India processing their own payments with our own market knowledge. We've invested in them, okay? We remain one of their strategic investor, but with a large minority for sure, and we help them to scale. These are the type of opportunities we are looking for, really. We try to be as selective as possible on that one. How does it translate into financial, all of this, right.
The first one is, this is the top line growth really over the past few years, 45% in total transactions, 34% in volumes, right? Short of 30% in terms of revenues. This is what we want to continue to deliver going forward. Okay? We can do this because we are in the right markets for growth, gaining share, releasing new products, and also with consolidation. With scale, we also need to work on efficiencies. By efficiency, what do I mean? Automate. The goal is to have as much volumes without any human intervention. Automate everything. The second thing is, of course, consolidate your platforms, right? Consolidate your platforms at least regionally and keep your cost flat. All of this improves the margins, actually. We have improved the margins with our take rate, which has been flat, but also by lowering the cost of transactions.
With all of this, with scale and efficiencies, we've reached profitability in our core business. Now, okay, there's still some work to do to get to the kind of industry average in our markets in terms of profitability. That's the direction. We're going to get there. While we do this, we continue to invest in building our credit business. Building a credit business means first, you really want to increase the volumes of credit that you issue to consumers. The second thing is you want to actually broaden the range of products, not just buy now, pay later, but also installments, but also personal loans, the full suite of products, and build your own loan books. As you do this, you've got to make sure that you pay attention on how you manage the risk and the losses.
That's what we've done over the past two years, the loss rate on our loan book, 2.6% right now. In fact, one could argue, is it too low? With all of this, what I would like you to remember is the right markets at the right time and big opportunity ahead of us, right? Our level of ambition is, yes, to build a EUR 10 billion-EUR 15 billion business. How are we going to do that? Well, we've got to deliver on India, on our plans, and building this ecosystem between consumer merchants and banks. We've got to deliver on our credit ambitions. The third one is we've got to get busy, not just with one iyzico, but more iyzicos. If we do all of this, we're going to get there. That's it for me, really.
Now I would be happy, maybe to take some of your questions. Number three, yeah.
Hi, good morning. John Kim from UBS. Within the Indian market, who do you see as your primary competition for the strategy you're executing? Can you give us some color on competitive dynamics, particularly around the better-funded players, potentially like a Paytm? Thanks.
Yeah, absolutely. For India, at the moment, the market, 50%, roughly, the banks themselves still process the payments. All right? The classic banking industry. That's why we are very aggressive in building our own white label platform and say, Hey, guys, you should just outsource it, basically. That's one. The second thing is companies like BillDesk, Razorpay. What do they do? BillDesk created a fantastic platform for government and billing. That's their market to lose. That's what we're going after. Second one, Razorpay, well-funded, going after the small, medium businesses. We've been very focused on enterprise. Now we are entering that market. I've talked a lot about consolidation, but at the end of the day, you need to win because you have superior product and that you can innovate. That's what we are doing in India. Second thing you mentioned, Paytm. Fantastic example.
I love Paytm because what they've done for India is great, actually. They've enabled a lot of consumers to start transacting online. Look, the Chinese model of the super app has not worked so far. The second thing is you've got to understand the huge difference between China and India. UPI is an open platform. You can show up tomorrow and say, Hey, I want to plug into the UPI platform and start accepting bank payments. That's what people have done. Google, WhatsApp, PhonePe, and others. Basically, Paytm was alone a few years ago. Now you've got an incredible multiplication of consumer applications. We don't want to be in that game. In fact, for us, it's like, Hey guys, we can help you. We process some of the transactions for PhonePe, and the same with Google, actually. We stay behind.
We're quite happy to stay behind and let these guys fight for the consumer. That's how we know we see the market shaping up. We're still number three.
Hi, it's William Packer from Exane BNP Paribas. A couple from me, please. In the Indian market, could you talk us through the regulatory outlook and potential headwinds as you extend down the value chain into areas like consumer credit?
It feels like an area that could face some government intervention. How do you manage that risk? Is there anything we should be thinking about? Secondly, Prosus/Naspers has a pretty unique seat at the table during Tencent's disruption of payments in China.
Could you talk us through some of the key learnings and how you're using those within your payments business?
Yeah.
Thank you.
On the first one, regulation. Different elements of regulations, privacy, payments, credit. Privacy, we live in a GDPR world. Not just in Europe, all over the world. What does it mean? It means that you've got to be extremely careful about how you manipulate data, how you get data. Naturally, GDPR is starting to be used as a blueprint in many markets, like in India. Actually for us, the opportunity and the challenge at the same time is how we can get ahead of the regulator and try to help him shape his own views and be ahead of the other industry leaders in setting the standards for how you use data. That's one. Payments. The government is extremely active in India to push digital payments. What it means?
It means also capping some of the fees you can charge, being very aggressive at pushing UPI, for instance. Just one word on that. When UPI came on board, a lot of people were really scared about, Oh my God, how are you going to make money with UPI? You charge 1.5% for credit card. For UPI, you charge 35 basis point. The way to think about it, very simple. UPI, net banking payments, the same, 35 basis point. Which is roughly half of what you charge for debit cards, which is in turn half of what you charge for credit cards. The thing is, actually, the take rate is lower, but the profit margin is higher because the cost is almost zero to process these bank payments with actually zero fraud.
What's happening to our market is that the regulation is pushing a lot of new volumes, new consumers, incremental transactions. Naturally, this has improved our bottom line. UPI today is huge in terms of transaction, but it's still P2P. We start to see this in terms of merchant transactions. It's just 5% right now. We believe it's going to go to 15%-20%. We believe that with the regulation, actually, this is going to help us as an industry, and this is going to help also more and more consumers get to the market. Actually, it was a net positive. The third one is around credit, absolutely. Look, we are going after people. The moment they start using a product, for most of them, that's the first time they ever used a credit product. We've got the responsibility to educate them.
We've not waited for the regulation around responsible lending. We've created our own responsible lending guidelines, not just for PayU, but also for PaySense, also for ZestMoney, where we are the largest investors. That's extremely important because here again, the regulation is No. The way to play with the regulator, I would say, is either you can get ahead and show that you want to be responsible in the market and charge the right rates. We are charging 25% APR, which is the same rate that HDFC would charge for the consumers. You want to get ahead of that. I think the regulation, yes, will come to that market on responsible lending. I think here we are one step ahead.
Tencent? Sorry.
I forgot your question on Tencent, of course. Hey, look, I remember two years ago, when we had our big annual strategy meeting for Naspers then, Prosus now. It was in Beijing, actually. We spent three days all with our colleagues from Tencent. Actually, we work closely with them more than the WeChat Pay division, actually, more than the famous division, which is in Hong Kong. We work together comparing notes about the market, about the companies that we see. Also look, as I said, for credit, all of that stuff has been done in China a few years ago. We are just porting this to India. The way you use your own data, the way you build your own credit models, the way you push it through the merchant. The only difference, you know what?
Is we don't have a WeChat in India. Try to imagine if we had a WeChat in India, Bob will be very happy, right? Hey, we have Flipkart. Hey, we have PhonePe as well. These are the guys we can push our credit solution with. Yes. Do we work with them? Yes. Do we learn from them? Absolutely. All right? Again, they also look at India like, wow, that's a completely different market. It's not the same ballgame, right? Other questions, maybe at the back? Yes, number eight.
Hi, good morning. Michael Willar from Stenham Asset Management. Just one or two from me. You mentioned Adyen and how you partnered with them. Can you just help us understand what you mean by that? Secondly, a lot of what you're saying with the utility of PayU is what Adyen will tell you.
Yes.
Is how they have a localized platform where they house risk management, gateway acquiring. I guess my question is, when you're doing RFP to merchants.
Yeah
Why would they choose you over Adyen? Would it be price, or would it be the efficacy of the product? Then just one last question, once you've answered that.
That's already a big one. All right. Fantastic business, what these guys have built, it's really incredible. This single platform and how it works for big global merchants, really unique. The reality, as I said, is when you have 300 alternative payment methods in all the markets, the question you have is, how do I give these alternative payment methods to the merchant? Do I build a direct connectivity, or do I go through a partner? If I do it directly, what do I get? I get better conversion. If I go through a partner, what do I get? Well, less headache, I'm not reinventing the wheel. I think the tension and the discussion with them is always the same. When do you go through PayU?
When you need to get access to all these payment methods in some markets where you know you're not going to go, and you're better off partnering, which is basically, we are splitting some of the fees. If the opportunity is big enough, then you should build it yourself. The problem is building takes some time. That's on how we establish the partnership there. That's a dynamic conversation, as you can imagine. If you're a merchant, how do you choose? If you're a merchant, look, the reality of big global merchants is they don't really like to be using only one provider. They will always start by telling you, Hey, you know what? I need a backup. Hey, actually, you know what? I need to have this solution in this market. Why is Netflix using us in India? Why is Facebook using us in India?
We can tell them, Look, we're not cheaper, certainly not, but we can give you 85% conversion rate on all transactions. The rest of the competition, much lower. That's real money. That's one. Second thing is, why would an Uber use us in South Africa and in Argentina? Two different markets. Because they've done the integration once. We try to simplify that. Look, the bottom line here is this is a market where people don't stay in just one segment. People doing big global merchants start to then going down, and we start going up. Are there some friction? Yes. Can we win? Only if we stay super focused on delivering the best solution in our markets. We have no intention to go in delivering card payments in Europe or card payments in the U.S. Why would we do that?
Doesn't make sense for us. Let's be just super focused. You have a second question, I'm sure.
What is your take rate? Just on your profitability, you said you aiming for 12%-15%. Is that EBITDA or?
Yeah.
Adyen, again, is a 55% EBITDA margin business. That tells you that you guys are doing different things, but something similar.
Take rate, about 1%, 100 basis points, right? You can see that there was a slide there, pretty stable over the past three years, actually. Take rates vary by countries. Much more in LATAM, a bit lower, actually, but not that lower in India. Actually, it's increasing, so that's a good thing. Look, when it comes to the EBITDA, hey, I look at the industry, and all the peers. First, the peers in our emerging markets, well, that's more around the 12%-15%. If you're talking more about big European companies or U.S. companies, what I see is that there is a trade-off between the profitability and the growth. Usually, you will see the EBITDA going up quite quickly and the growth going down. Actually, that's why it's driving the consolidation. I think Adyen is an exception to the rule.
It's a great company for that reason. Can we get there? Well, you know what? Just in the type of merchants that we are serving together, big global brands doing cross-border, we get also to 60%-70% profit margin on the transactions because we charge FX, and so on and so on. The reality is we have a lot of volumes also coming from domestic merchants. There was one here, but Okay, last question and we're done. That was the last question. Thank you.
Welcome back. It's convenient that this is a room that used to hold gas, because I will now fill the room with hot air. I'm here for all the bad jokes today, in case anybody wasn't clear. Bob touched on it earlier today, but today I want to talk about the food ecosystem, and a lot of the conversation that seems to play out in public focus on consumers. I want to make sure that today we also talk about the value that's created for drivers and also for restaurants. Let's start with our starting point. We're in the process of building the global food delivery leader. We're present in over 40 markets and the leader in 36 of those markets, covering more than half the world's population and with pretty phenomenal order growth.
I want to start with what attracted us to the sector in the first place. I think this is a theme that will also cut across the presentations that you saw from Bob, Martin, and Laurent. It's a big area of consumer spend. It's a global consumer need. As we all just experienced, it turns out everybody has to eat. There's also this universal need that was not fully addressed by technology. Last, and again, a theme I think that cuts across our classifieds and fintech investments and operations as well, it's a global need that plays out differently in different local markets, and that suits our DNA quite well. Last, perhaps most important, there was no global leader for the space. We saw an opportunity for us to fill that void. To date, we've invested just shy of EUR 3 billion with a 30% IRR.
That investment, I was talking to some folks at lunch about this, it all started with an investment in iFood in 2013, and it's in some ways now hard to believe that a $2 million check has led to the building of this global sector. We've obviously committed more capital since. When we first invested, iFood was doing less than 100,000 orders a month and operating only in São Paulo. Today, they're doing more than 20 million orders a month and operating in 800 cities across Brazil. We're the controlling shareholder of iFood, and I spent a lot of time with the iFood team. Fabricio will give some color shortly on the business. He's the CEO of iFood. I'm sure he'll tell you, in this case, we're not just an investor, but we're also an operator.
We've helped iFood build 1P capabilities over the last 12-18 months. Today, the first-party business for iFood represents more than 20% of orders. That 1P volume is in very good shape compared to its nearest competitors. It's basically as big as the number two and number three players in Brazil combined. Moving to Swiggy, we made our first investment there in 2017. When we invested in 2017, Swiggy was operating in only seven cities. Today, they operate in over 500 cities. They're opening a new city basically every two days. You'll notice across the presentation, we sort of toggle between talking about countries and cities. This business model does not play out at a country level. It plays out at the neighborhood or city level. Through the conversation today, we'll move pretty freely across the geographies.
Our investment in Swiggy, and actually Harsha will be on stage later as well, has helped Swiggy build the leading food delivery platform in India. It's really AI-driven, a theme that's also cut across the presentations today. AI, in the case of food, has allowed for personalized consumer experience, but also opens opportunities for new meal occasions and optimizing pricing and yield management for restaurants. Swiggy's taken that platform and food delivery and moved into things like cloud kitchens, private label brands, and convenience buying. Again, you'll hear more about that from Harsha later. The third leg of the stool for us is Delivery Hero, obviously a public company, and I'll let Niklas and his team can talk about their business. We've been just blown away by first the footprint. It has a phenomenal operating footprint for Delivery Hero.
In the time that we've been working with Delivery Hero, they've been improving operationally and also had some geographic expansion. What you'll see, hopefully, in our presentation today is a good foundation for food delivery, but also a lot of growth in the future. Touched on it a moment ago, in terms of geographic expansion, the one thing I want to call out on this slide is if you compare it to other online or even offline industries that you might look at, geographic expansion in the case of food delivery, is less about crossing borders and going deeper into the local markets, deeper into the ecosystem, deeper into neighborhoods. Again, one of the themes you'll see across the presentation today. I mentioned it earlier, one of the things that excited us about food delivery was the total addressable market. It's massive already and will double by 2022.
It indicates a lot of room for our current food companies to grow. We expect even more growth beyond 2022. The sector's in very early stages, despite being quite sizable already. It's playing out differently. Food delivery is playing out differently in different markets. I know this in my lunch conversation, your reference point often starts with your home market. If you start with, in this chart, the three countries on the left, obviously in the West, your typical consumer spends about $2,500 a year on food. It's a reasonably large addressable market just right there, and it plays out very differently in the three markets on the right where food expenditure takes somewhere between 15% and 30% of folks' wallets, again, on a much smaller basis. Both are big opportunities. They're big in different forms.
Let's talk about how we got to today's state in food delivery. To do so, I want to start with how the world looked, basically before the internet. This is one of those sectors that existed before the internet. It was a luxury item for the West. Friday or Saturday night dinners, people in Western markets that wanted the convenience of a restaurant-prepared meal at home, they would call in or, it's going to seem like 1,000 years ago, or fax in their orders. Believe it or not, obviously iFood is not a Western market. A big chunk of iFood's order volume in the early days was done by a fax. Show of hands, how many people have a fax machine? I would've embarrassed you. No, I'm kidding. The first generation of food delivery basically moved that activity that was happening in the offline world online.
It was taking the refrigerators, not the refrigerators, the menus that people had on their refrigerators and digitizing them. That was the degree of technical sophistication. Many people still called in their orders. It served basically the same purpose that it did in the pre-internet days. Where things got interesting was in the second generation of food delivery, and for most markets, this is where the world sits today. The revolution really started with the smartphone. The smartphone made more restaurants available, along with first-party delivery. The ability of riders to be able to be tracked, opened up a whole new set of restaurants, a whole new set of cities, and unlocked tremendous value and convenience for consumers. Now, in many of our markets and many of our operations, we're seeing the business model shift from the second generation of food to third generation.
It's capitalizing on a logistics network, and recurring engagement with consumers allows these platforms to get deeper into the food value chain. We're seeing that with some of our platforms. Harsha and Fabricio will talk about it later, moving into things like grocery, cloud kitchens, and convenience stores, also private brands. One of the things that excited us about the sector and did early on and been more impressed over time is how strong the consumer cohorts are. Food delivery has the highest consumer retention rates of certainly the industries that you see here. The interesting thing about it is they're still improving. You'll notice this is a chart from the U.S. You'll notice in recent months, the cohorts have ticked up over time. The platforms in the West are adding more meal occasions and more personalized experience for consumers. It makes it more and more relevant for them.
Again, this graph is for the U.S., which is a highly competitive market, and still the retention for platforms is still great. We know that if it works in the U.S. in a heavily competitive market, our instincts are that it'll work well all over the world. Here's how it's playing out for just food delivery platforms, and this is a similar chart for just food delivery players, and two of ours are highlighted, Swiggy and iFood. You see that they rank among the top food delivery companies globally, Swiggy coming in at the very top, and iFood still in the top third of players. This shows how 1P logistics and AI-driven platforms can improve the customer experience, and in the case of Swiggy, bend that curve up.
One of the questions that I often get about the sector and can be best answered on a chart like this is how would the leading food chains, independent of platforms, rank? You'd often find, in most geographies, a McDonald's, a Domino's, or a KFC would fall below the bottom-ranking cohorts. Really, the power in the sector sits with the platforms. The food opportunity is big in developing markets and also in the West. We see that it's a pretty stark contrast. I'll get to a profitability question that I'm sure many of you have later. You notice, should be no surprise to folks here that developing markets are bigger. They're growing faster. We see that in developing markets, people are consuming services of all kinds more and more rapidly, especially food. The big question that we often get about is around that third line, the AOV.
Folks often have questions, well, if it's hard to make these businesses profitable in the West where the AOVs are high, how can you make it work in markets where the AOVs are a fraction of that? I'll touch on that a bit later. First, a warning, if you get a pizza that looks like this at home, I wouldn't eat it. It was probably cut by a serial killer or a psychopath. I like this chart. We, as a group, spend a lot of time talking about the consumer need and the consumer behavior. This gives a lens on restaurant economics. It's a Brazilian example, basically how the profit pie gets sliced. We know from looking at sectors around the world that O2O business models, they eliminate a lot of the inefficiencies of traditional brick-and-mortar businesses, and food delivery is not any different.
In the case of food delivery, sadly, the food is about a quarter of what you're paying for as an end-user product. With food delivery platforms, they started as, certainly in the third-party marketplace model, as a way to just address that marketing slice, that narrow sliver. Over time, as more volume's gone through, been able to attack the bigger slices of the pie, labor and real estate, specifically. Food delivery platforms can push incremental volumes through restaurants, especially at idle times, allowing restaurants to create better hours for staff and allowing restaurants to better plan peak demand. These allow restaurants to better leverage their existing infrastructure and introduce new meal occasions. One of the examples many of you will have had at lunch is iFood Loop, one of the lunch offerings that we had today.
Fabricio will talk about how that has radically changed the restaurant economics linked to iFood. Similarly, one of the conversations I have a lot with entrepreneurs, restaurateurs, actually, is the risk that they take in real estate as they're thinking about operating their business. The easiest way to go bankrupt as a restaurateur is to open a second location and bet on real estate wrong. Harsha will talk a little bit about, in the case of Swiggy, how Swiggy Access allows restaurants to de-risk that geographic expansion through their cloud kitchen model. A big question I get about this space is about profitability. I thought it'd be good to avoid it entirely. No, I'll tackle that head-on and try to tie this back to company examples. Let's start with a simple formula. We'll start with revenue.
On the number of customers, you'll have seen over the charts I showed earlier, an explosion in consumer demand globally, and most of the growth is ahead of us. This is a category that's quickly moving from a weekend luxury to an everyday mass market product. As you saw in the charts there, the consumer retention remains strong. Moving over one to order frequency, we're seeing a dramatic increase in the number of meal occasions for the sector. To give a sense of the volumes, iFood's top 1% most active consumers order the product 23 times a month. iFood's highest cohort orders once a day. Swiggy's top 5% of customers orders about 80 times a year, and they have 90,000 customers ordering once per day. This is not a weekend luxury.
This is an everyday product. From a modeling perspective, I know there are folks that look at this closely, the last two elements of the formula get a little bit tricky. With AOV as an example, our platforms are trying hard to push costs down. We want to bring the AOV down to continue to push this mass market product. The way to do that is to pull inefficiencies out of the system, specifically in logistics and using personalization and AI. Take rate can also be a complicated one to model, right? Especially as it's cleaner if you're either dealing with a first-party business or a third-party marketplace. The reality is the world is getting a little more confusing. We're seeing more and more hybrid models.
The one thing that I'll say about how take rate seems to play out and how our companies are having some influence on it is they work closely. You become a big part of the volume of the restaurant. You start to work more closely with the restaurant to figure out how they can best optimize demand. Sometimes that means raising prices at times when drivers are more limited or demand is high. Sometimes that means lower prices. Shifting to the cost buckets for a minute. There are two cost buckets. There are two that I want to zero in on here. First is marketing and specifically customer acquisition costs. Across the globe, certainly based on the conversations that I've had already today, folks are calling out that they're seeing marketing spend growing dramatically.
Later on, I think it's maybe two or three slides from now, you'll see that even for our companies, while the overall marketing expenditure has grown, CAC has remained relatively flat and the consumer cohorts hold up. While the overall spend is high, and that certainly has an impact on profitability, the economics of this hold up. The other lever that I'd focus on here is delivery costs, especially as the world shifts to 1P and a lot of the growth in the sector shifts to 1P. I think Fabricio will spend a good chunk of his time talking about how they're using AI and technology to lower delivery costs and to better optimize routes. Really, the way to solve it, you're not going to push wages down, is through better optimization. Simple concepts like batching of orders and better routing is how you get the job done.
Now for a bit of an eye chart. This is an illustrative comparison of 3P versus 1P model, tried to make this as like for like as possible. I'll start with a mistake. That's usually a good place to start. In the spirit of conservatism, we made first party and third party roughly the same AOV. The reality is, in most markets, first party AOVs are much higher. Still, you'll see on this, the math works, not in the sense that you might think. People often ask about, Well, isn't the marketplace model most attractive? Certainly in the narrative that's playing out in the media today, it's this battle of business models. There is no argument that marketplaces have the most attractive percentage margins. There's no argument there. As you see at the bottom in the orange, the absolute dollar margin can be the same.
We've seen that this works in the West, but also in markets with lower AOV, like Brazil and India. Fabricio and Harsha will talk on that more in a moment. There are a few cost items that I'll speak to specifically here. First, again, is about marketing and discounting. Coupons are intended to drive trial, kind of a simple concept. Introducing your product to new users, but have often been used as a crutch by some of the weaker players in the space. One of the things we've learned is that all consumers in this space are not created equal. There's a lot of empty-calorie GMV out there. The good news is, businesses with leading positions tend to have an advantage when it comes to couponing. I mentioned earlier, we're involved in the leaders in 36 countries.
We have an unparalleled view into consumer demand, and we can come up with smart couponing strategies. The second bucket here, again, going back to delivery fees. We've learned, and I talked about the volumes that our best customers are doing. Interestingly, our most valuable consumers are willing to pay for the convenience and quality of our products. In many competitive situations, the industry sort of quickly devolves to a blanket free delivery approach. Our platforms have learned when and where to apply free delivery. Third is OpEx. Logistics is a scale and technology game, no surprise to the folks here. You'll see a lot in the presentations later from Fabricio and Harsha, how we use technology to drive costs out of the system. Last point about this slide, I don't like presenting illustrative slides typically because they can be fiction, but this is not fiction.
We see this model playing out in a lot of our neighborhoods and cities around the world. I'll go deeper into our existing businesses, iFood and Swiggy in particular. Let's start with iFood. This group will have seen on different investor presentations before that iFood was a profitable business, showing classic marketplace economics as recently as the summer of 2018. One of the things we learned is that marketplace model hadn't fully addressed the market opportunity. While this looks like it's a nice business and a nice trajectory, there was actually a much bigger business to be built. We invested significantly in the business to help them grow, increasing the geographic footprint of the entire business, and also going deeper into the operations in specific cities. I mentioned before that in 2012, iFood operated in one city.
They had 800 restaurant partners and a good chunk of the volume, again, coming via fax, which still blows me away. Today, it's a totally different business. More than 20 million orders per month in over 800 cities. It's a well-loved brand in the country. If you spend time in Brazil, in the evenings, you're very likely to see iFood drivers in the street. In over seven years of our investment, our team has worked really closely with the iFood team on a number of dimensions. First, and it's core to the group DNA, is on corporate development and M&A. This is, again, a city-by-city game. When we first got involved with iFood, it was only operating in São Paulo. How we're able to color in the map there, as you see, is through rolling up a lot of the local city players.
Also layering in technology that can help support the rollout of things like logistics. Another area where we provide help is on product and technology. Hopefully, some of you got a chance to see Euro and the AI team out in the lobby. That team spends a lot of time with the iFood team, helping optimize things like pricing and logistics. The last thing that I'll point out here is that we're the controlling shareholder of iFood. It's not an arm's length relationship. We exist at the elbow of the management team in making, operating, and strategy decisions. Seems to have worked to good effect. This is a share evolution for iFood, and you can see iFood's managed to maintain share in a rapidly growing market. I'll call out a couple points on the slide.
If you compare September of 2019 to March of 2019, iFood added about 4 million orders. They added as much volume in that six-month period as the two nearest competitors, their total size were in March of 2019. They added as much business as the competitors had. iFood's first-party business was already bigger than the two competitors combined, which are pure first-party businesses. There's a version of this slide that I was thinking of putting together that would've broken out iFood's marketplace business and iFood's logistics business, and then the iFood Loop product as separate line items on this chart. If you were to see that, you would see the marketplace business is the largest in the country. iFood's logistics business is the second biggest. Come Rappi and Uber Eats, and then iFood Loop is quickly moving up the ranks.
It gets downplayed in this setting sometimes, but it's important to note that even though iFood has moved into these innovative products and into logistics, the marketplace business is still growing nicely. Over the years, and one of the reasons we felt comfortable investing more money in the company, is that the majority of orders have come from returning customers. As the company grows, that continues to be the case. We see that consumer behavior is quite sticky, and the consumers stick with iFood. Here's a more normally cut pizza, so you can be safe. We see that order frequency also increases over time. Again, we're excited whenever we see something like that. In addition to adding more and more customers, the consumers we have are using our product more and more frequently.
iFood has the highest NPS in the Brazilian market among food delivery players and among the highest across all industries in Brazil. It's got the best consumer experience in the market by far. Recently won a Consumer Choice Award from the leading consumer review website in Brazil that counted something on the order of nine million votes. iFood has the biggest presence, biggest coverage across Brazil for restaurants and drivers. Actually, the gap between iFood and Rappi and restaurants is impressive. I was going to say laughable. It's not. We don't laugh. It's very serious. The right-hand side speaks to how strong iFood is already at first party. You'll notice in the summer of 2018, when Rappi had a bit of a lead in terms of driver installs.
This was, I think, a wake-up call for the team and for us, and you see how quickly we sprung into action. Now that we have a sizable lead over Rappi, it opens up a considerable opportunity for us to serve customers better. That logistics network means you can pump a lot of other things through. It's a strong foundation to build upon. I'm sure when we flashed that chart that showed the map lighting up, it makes people nervous. It seems like a lot of money every time. When it's red on the chart, it looks like red, it looks like losses. You can see here that the company is getting better at rolling out new cities. It used to take 20 months to launch a new city. Now that's down to three. The cost of a launch has also come down considerably.
It's come down to about a third of what it was before, really on the back of a repeatable playbook. The team has a standard marketing toolkit and what they call a missionary launch team that descends on a city. With this approach, they can really launch about a city every day. The concern I would have, and I did have when we were rolling this out so quickly, was, are the consumer cohorts holding up? You can see on the right-hand side that our most recent cohorts are performing in line with some of the oldest ones from 2014. It's an abundance of good news, reduction of time and cost to launch a city and strong cohorts. Now shifting to Swiggy. Swiggy was also a profitable business when we found it.
Contribution margin positive in aggregate in 2017, four of the seven cities that it operated in were also profitable. In a market that's actually quite hard to run a profitable company. The problem, if I can state it that way, was that the company was sub-scale. Over the course of the last two and a half years, we've helped Swiggy go from seven cities to over 500, scale their delivery network, and also their partner restaurant ecosystem. The scale is actually staggering, right? The idea that they've gone from 6,000 delivery executives to over 200,000, it's hard to pull that off in two years and really on the back of a stellar management team. Especially in a market like India where the restaurant behavior and the food delivery market was not there. It's pretty staggering to be able to pull that off.
One of the questions that or concerns that I would have is, okay, costs must be just not growing as you would like. The first thing that we took a look at is customer acquisition costs, and you certainly see the green. You see an explosion in new users. CAC in orange has stayed relatively flat. Again, a similar story as what we saw with iFood. It's on the back of a good product where existing consumers are ordering more frequently. Once again, a similar story as what you've seen with iFood. Cities are becoming easier to launch. In the early days, it took 90 days to launch a city. That's down to nine. Cost to launch a city has come down from EUR 25,000 to under EUR 3,000.
Funny enough, I caught Fabricio and Harsha, who you'll meet in a moment, talking earlier and trying to compare notes on cost differences. It's not low enough for them. Interestingly, a similar story as what we saw with iFood, as the new cities are scaling faster than the old ones used to. The companies are getting better and better operationally. Swiggy sees an opportunity with the ecosystem to really build one of the top food brands in India. The chart you see here is of the leading food brands in the market. For those who aren't aware, in India, Domino's is a listed company. It's valued at over $2 billion. Swiggy's private brands are on a pace to get to that scale in a matter of years.
We think that Swiggy will have many brands that'll be among the top-ranking private brands in India in a couple of years. They're doing quite well in a highly competitive market. They have a strong competitive position, clearly lead the pack. Certainly, the charts on the left compare Swiggy versus the number two and the number three players. What I like most about this is the information on the right. How Swiggy has gotten to this leadership position is by being a product and technology company and serving its consumers better. The strengths that are mentioned about competitors in NPS studies always start with discounts. They're building these things the right way. This is enough of an overview from me. I'd like to introduce Fabricio, the CEO of iFood, to talk about his business. Fabricio.
[Presentation]
Good afternoon, everyone. Hello. Whoo. Welcome to the Brazilian part of the presentation. Hope you are excited. I was in Brazil yesterday. It was sunny, 30, 40 degrees, and they said, Come here, it's nice. Nice weather. Anyone else from Brazil here? Anyone? The Brazilians are here, good. You get some caipirinhas in the end. The best question is caipirinhas in the end. Hope you enjoy the Brazilian part of the presentation. My name is Fabricio. I'm partner of Prosus and Naspers before for many years.
I am CEO of iFood, and I'm running iFood for a few years. I'm super excited. We are growing a lot, very fast. I could talk for 22 hours about iFood. I talk too much, as you are going to see. Today I'm not going to talk about everything. I'm going to talk about how we are doing innovation and artificial intelligence. I know someone is saying, I think this guy there, he's saying, Come on, artificial intelligence, everyone talks about that. I want to get into the details. I want to say how it impacts our business, how it's going to change the world. I'm going to explain the technical details in Portuguese. The Brazilians, you can ask them to translate. Just kidding, no technical details. I'm going to talk about artificial intelligence in more details.
I really believe artificial intelligence is going to change completely how people eat. Not like 5%, 10%, a little nice thing to show on a PowerPoint, but change how people in the whole world eat, starting in Brazil. We are very excited. I'm going to show you the early results. There are three big things we are doing with AI today. The first is change the way we do logistics, and the change is super ultra-dramatic. It means faster time, people receiving faster, monitoring when they receive what is great, on time, and more important, cheaper. Cheaper makes a whole difference in the whole business. If you can deliver cheaper, much more people can buy what we are selling. Second, we are going to reduce the price of the food. Again, if you can reduce the price of the food, many more people can order.
Someone's going to ask here, Profitability. Profitably, obviously. No NGO. Reduce the price and make money. Third, create new eating habits, create new products. I'm going to show you a new product that some of you had eaten in the lunch that's called Loop. That's it. Moving forward, AI changes complete logistics. Big impact. Because we have the history of hundreds of millions of orders over the last year, we can predict in a way that was not possible a year ago or two years ago, exactly how the logistic map is going to work. Until two, three years ago in the marketplace world, you just keep waiting for an order, the orders arrive, then you ask the kitchen to start producing, then you send someone to go there, the guy waits for five-10 minutes, you go to the delivery wherever it is.
It is completely different from the way we do today using AI to predict production. The first thing that we can understand, we can predict the time that we use it to prepare the food, specifically that food on that restaurant on that time of the day, on that day of the week, can take five minutes or 10 or 12 or 18 or 22, and we can tell it to the customer, and we can send a driver exactly on the moment that the food is ready. It reduces a lot the delivery cost if you can arrive at the same time the food is ready. More than that, because I keep track of all the hundreds, the thousands of drivers, tens of thousands of drivers, I can also batch orders.
In some products, we batch two or three orders together, and we can even predict the right estimated time of arrival to the customer, what is very important to our customer experience. In some cases, like Loop, that hope some of you have ate, we can batch up to 15 deliveries in one driver. When I can batch 15 deliveries in one driver, the delivery cost reduces a lot. This is critical to our vision where food delivery is not something to order at Friday night with your wife or girlfriend. Food delivery is a better, cheaper, faster, better quality, nutritious way to eat every day all the time. That's what we are building. We can position the drivers before the drivers make the order. We can batch multiple things, and we can optimize the routes.
We use a lot of tools like these funny summaries we have here, where we can see during the day where will be the peak hours, where will be the place that driver should be before the order is placed. We can use our simulator to test many models of how much we pay to each driver and how we optimize the driver pay, and we optimize how much the user will pay without needing to test it in real life. AI is helping us today a lot, and it reduced our delivery time from on average 40 minutes one year ago to today, 28 minutes. This is the average delivery time. Many people receiving 20, some people 28, 40, but this is much, much better quality of service.
It's important to tell you, many people ask, in 1P versus 3P, you are a marketplace. iFood, we're a marketplace player. I can't use very, very high technology and innovation and AI when I am in a marketplace business. Not only the user doesn't monitor the driver, but also I can't batch many orders. I can't optimize the route. I can optimize the price I'm paying, and I can't offer new restaurants to the users, the restaurant that doesn't have delivery. All of that is possible because we are a strong 1P player. We also, for example, can show the driver, you should move to that areas with high demand, and you will make more money.
The driver itself can take the app, see how the demand is going to process in the next one, two hours, and reposition themselves online to try to make more money and get reports about how much money they are going to make in the next one hour. Using data enable us to not only reduce the delivery time, but reduce the delivery costs. Over the last one year ago, we were costing BRL 16 to deliver one order. Right now is 40% less, below 10, nine point something. This 40% reduction means better economics for sure, but means a much, much bigger market. One of the biggest problems to people order more is the delivery cost. We are handling that through technology. Because all of that, we've grown a lot.
Our 1P business was 1%, 2% of our business, now is more than 20%, a little more than 20%, and it's growing 10 times. It's not going to stop growing. This is the growth pace we have today. We are much bigger today than the two players that are competing with us. iFood today is doing more than 20 million orders and more than 20% in delivery, and we are just starting. This is just a first thing of AI. The second big thing is reducing the price of the food. If we reduce the price of the food, again, the total addressable market becomes much bigger. Many people can't pay for expensive restaurant, but if it is cheaper and easier, spend less time, and there is no delivery cost, than doing food in home, the market is 90x per person per month, and that's our dream.
We are doing that through AI. How we are doing that? We can understand, we can run demand curve simulations, we run it for real to understand how the real user behaves. To understand if the price is 50% lower or 30% lower or 20% lower, how much more you sell. We push this information to thousands of restaurants, together with our supply chain business that's called iFood Shop, we can reduce the price of the food, buy in bulk the ingredients, make sure that they are reducing their price, let's say, by 40% and increase their sales by 100%-100%. We do that online at scale with thousands of restaurants using AI, this was absolutely, completely impossible one to two, three years ago. The third thing I want to show you, because I talk too much, my time is almost over.
The third thing I want to show you, we are creating completely new products because of that data science and AI. This product that you had learned today called Loop is based in a demand from Brazil. We call it marmita in Brazil. That is kind of like the cheap daily food that the regular worker eats every day. iFood average food costs like EUR 7, but this average lunch meal is around EUR 3. That's the price point we have to get, EUR 3.50 profitable to make this amazing big market work. That's what we've done, again, using data and technology and innovation. This is a very new product. We created a set of, let's say, 10 to 15 different menus with the most ordered and most desirable food that people want. The cost of sale of that is substantially cheaper, like half of the average similar food at lunch.
We are using cloud kitchens for production. We are using the kitchens not between 12 and 2 P.M. That's the time when 100% of the kitchens are at 110% of their capacity. We use the kitchens between nine and 12. When we are able to use this asset between nine and 12, and plan the orders one, two, three, four days ahead and optimize the supply chain, we can reduce the cost substantially. That's what we are doing and giving this cost benefit to our customers at a price point that was impossible, including the delivery. This is helping us to address a much bigger market, and I have very high expectations it's going to grow a lot because it's including many new customers in our business. We deliver it on average at 10 per delivery driver.
In a regular delivery in a regular company takes one delivery driver per delivery. We are doing two or three, here we do 10. That's why you saw the small packages. They are made to pile one with the other. One guy like that has on average 10. Again, the costs go down to 25% of the regular delivery costs. This changed completely the market we are. iFood Loop is growing very quick. It's a new business. We are in test phase until June. We started to scale in June. We have 300,000 customers coming back and with a frequency that is very, very high. We are now in 30 cities. It's already 35% of the lunch on those 30 cities. iFood as a whole is in more than 800 cities.
I think we are going to push it and expand it to whole Brazil, and it's going to be a new way to think how we order food in the future. Everyone waking? Everyone? Caipirinhas to anyone? No? Good. Someone is sleeping there. Lost your caipirinha, sorry. My last slide. To finish, we used a lot of technology, innovation, AI, data science to change price of food and changing price of foods makes us on a bigger market and enable us to serve more customers. My objective for the next six months is to use the same technology to have a social impact, specifically on entrepreneurship you saw, make restaurants make more money, make drivers make more money, and even training them through virtual training to enable them to grow better their business.
More than that, use technology through waste management, meaning people should be able to say if they prefer a restaurant without plastic, for example, reduce the number of plastic or even through our supply chain, serve the restaurant with more ecological solutions to nutrition. That means promoting better restaurants and food with better nutrition. My point here is that our impact is already very, very big. We have millions and millions of customers and also millions of millions of waste. I believe with the technology innovation we have used in iFood, we can have an amazing, big impact. That's the story I hope to tell you next.
Capital Day in Brazil, where the weather is much better. Thank you all, guys. See you next time. Here, Harsha. I forgot this part.
[Presentation]
Hi, good afternoon, everyone. I'm Harsha, co-founder and CEO of Swiggy. We're India's largest food delivery platform. We're five years old as a startup, started in August 2014. Today, I hope to give you a brief overview, in fact, maybe even go into some history of how India's food delivery market didn't exist not too far back and how we've been creating the category and also what the future holds for both the category and for Swiggy also. I would like to just talk about the brief points that we'll be touching. The first one is the historical bit, like the three phases of Indian food delivery market. We talk about how did Swiggy end up creating the category, what do we do well.
The last part is on what do we expect the future will have in store, whether it's adjacencies that we're exploring or the deepening investments that we're making in food delivery itself. I hope you'll enjoy what we talk about. Without wasting too much time, we go into the three phases of Indian food delivery market. The first phase of India food delivery was pre 2014. As may have been hinted even in the presentations earlier, eating out wasn't really a thing in India in a big way. It was a big occasion and even until 10 to 15 years back, it was for me an occasion to get dressed and go to the restaurant because it was an occasion. It would happen once in a month, once in a month and a half. That was my only big memory of restaurants growing up in India.
That didn't change too much even after, until food delivery came in a big way. Most of the restaurants, their only job was to fit into an occasion. Delivery was still very, very small and in the Friday, Saturday, Sunday kind of delivery behavior that was still going on. There was really no organized player at scale doing delivery. The only two players that were at scale that were doing delivery, maybe the one on the left is very familiar. It's Domino's. It was practically most of the food delivery market until 2014. The one on the right may be more familiar for the discerning audiences. How many of you know who we're talking about on the right? Okay, a few hands.
These are the Dabbawalas, the famous Dabbawalas from India, who would basically collect hot lunches from the homes of consumers and then deliver them to their offices while at work using a mixture of rickshaws and trains, whatever it took to get the hot meals on time. Literally, these were the only organized delivery players at scale, and there was so much more that could have been done. Now, pre 2014, we talked about how it was really small and when Swiggy started in 2014, there were a bunch of players, primarily marketplace, 3P providers and aggregators. In a country where the culture of food ordering hadn't become big already, the quality of service that restaurants gave, the focus that they had on delivery was not too huge because it wasn't a large business already.
That is a vicious circle because the quality of the experience left a lot wanting to be desired. The top three problems that we observed as consumers ourselves living the bachelor life back then, was one, the really good restaurants that we wanted had never invested into a delivery fleet. Number two was, they would have this arbitrary minimum order condition, saying minimum EUR 7, EUR 8, otherwise I'm not delivering this, treating as if these were rare commodities. The last one was the quality of the delivery itself. There was Domino's and then there was everyone else. You could see some of the pamphlets that would be dropped off at the doors proudly saying 60-minute delivery. We just couldn't get it.
There was players who were delivering under 30 minutes 90% of the time and then there's the rest of the market that's proudly talking about one hour delivery. We felt like there was a problem to be solved and we knew it would solve our problem. We wanted to make sure that it would solve others as well. With this logistics first approach, Swiggy went ahead and started its presence in a small neighborhood in Bangalore, solving primarily the problems on the left with the offerings on the right. From day one, we've been a company that had its own delivery fleet. Because of taking this logistics first approach, we were able to eliminate most of the friction. We got some of the best selection of the city which was otherwise unavailable for delivery open.
We removed the arbitrary minimum order condition and charged a small fee. The third thing was the lightning fast delivery. Some of you may be familiar with how bad Indian traffic is. We continue to deliver millions of orders monthly, close to 31, 32 minutes in delivery time. Just taking a crack at these big problems that were there at the time and solving it through customer obsession has meant that Swiggy suddenly started capturing the imagination of the millennials who wanted to order food but didn't even know it in a big way then. Once Swiggy came and did these offerings, five years and hundreds of millions of orders later, Swiggying food is now a real verb. If you have any friends in India, they will attest to it as well.
If you look about the comparisons that I was making to Domino's about how that was most of the market back then, you'll see that while Domino's has grown 2.6x in the period between March 15 and September 19, Swiggy's grown about 2,500 x in the same period, with an even larger reach in terms of cities and areas. We're now three and a half times of Domino's in terms of total gross sales in India. That talks about how much consumers have taken to a category like this, and it shows behavior that is consistent with how food delivery is becoming a utility everywhere and not just a weekend or dinner indulgence that happens once in a while. The next part that we're going to talk about is the not so distant future. Before this, maybe a quick quiz.
Does any of you know how many restaurants are there in Beijing? That's about 300,000. Does anyone know how many restaurants are there in all of India? Okay, 200,000. A little over 200,000. That kind of explains how early food delivery is catching India's imagination before the restaurant industry itself is developing. If you asked us what the frequency of consumption for our platform is on a user base that's at scale, it's incredibly high. It's actually higher than 90% of the geographies in the world by monthly food delivery frequency. It is very, very clear that consumers are just as hungrily seeking convenience as their peers elsewhere in the world. Food delivery is starting to happen much, much ahead of how it has happened in every other country in the world, whether it's the U.S., U.K., Europe, Southeast Asia.
20, 30 years, offline food evolved before food delivery started plugging into these ecosystems in the last three, four years. Whereas in India, we'll have a very, very different story. I'd be surprised if more than 80% of the sales that we expect to do five years out will come from kitchens that don't even exist today. That's really how different India is going to be from the rest of the world. At this point, we'll go into what are the problems that remain and what do we need to do to keep continuing to stoke the category. The first one is hyperlocal supply.
We've talked about how some areas in the city have pretty good supply, but some areas actually don't, even though they have a user base that's not too different because of how the cities develop, how commercial areas are the only ones that have a certain selection of restaurants. I said most of the restaurant's job was to fit into an occasion, has a bearing on the kind of food that they also make. It's not necessarily the most repeatable, functional option that you can do a lot more of. The third one is the affordability itself. While we already have an average ticket size of about $5, there is so much more that can be done if we're able to iterate on the supply chain, and that can facilitate more daily consumption.
It's not too different from how Fabricio was talking about Loop. These are the three big problems that we think, when solved, can get us closer and closer to the 90 meals a month over a period of time. While we talk about the problems that remain, we'll maybe spend some time talking about what Swiggy is doing exactly. Once we realized that supply is going to be a problem and we need to be able to do something to catalyze supply and make sure that the platform grows at a certain pace, that's when we set up a new vertical that has its own leadership team, management team at an arm's length to Swiggy, which is completely tasked with the idea of augmenting supply across geographies, use cases, to continue the user engagement journey that delivery began.
One part of that business is called Swiggy Access, where we have repeatable kitchen infrastructure across the country, which we give it out to restaurants for expanding into areas that they already don't have a presence in. We already have 1,000 kitchens established as a part of Swiggy Access. We've taken a million sq ft of kitchen space across the country and hundreds of brands who are starting to use it both to expand into newer regions in the same city or even to new cities and parts of the country. The second part of this business we call is the private label business. While Access takes stabs at primarily brand gaps or primary cuisine gaps, the problem number two that I talked about where there's so much more in functional, repeatable food to be gotten, private brands take a stab at it.
The graph on the left talks about kitchen space that is being set up around the consumer across the country. As we build more and more of these kitchen spaces across the country, not only do we have the largest delivery fleet in the country, but we're going to be 10 minutes away from 99% of our user base. We think of that as a fundamental superpower. What happens when a company has such a large delivery fleet and physical infrastructure within such close reach of consumers? Not only are you getting them their favorite food, you're also able to get it much faster and also much cheaper as you concentrate demand into higher velocity nodes than, let's say, distributing it very differently as how it plays out in the marketplace.
That's the going deep into food, catching the wave very, very early in the food journey of India and see how you can make the market continue to grow fast. The second one is the massive delivery fleet and high consumer engagement. We have close to 13 million monthly transacting users, which is one of India's largest user bases in Internet with a repeat user base that transacts close to four and a half times a month, which is India's highest consumer engagement in commerce. We think that we have a few tailwinds going here, the super strong consumer engagement, the largest delivery fleet that we've carefully built over this while, and the physical infrastructure that I talked about. I can see them coming together to offer a completely new world of convenience.
About a year and a half back, we crafted our mission statement from wanting to change the way India eats to elevate the quality of life for urban consumers by offering unparalleled convenience. We think convenience is the category that we work in. Food just happens to be the first category that we began with, and food is 90% a convenience business even today. The things that we've done in the last year itself, the first initiative that we launched is Swiggy Stores, where we now give the power of Swiggy and food delivery to any merchant inside the city. A consumer can go get delivery from pet stores, meat shops, groceries, pharmacies at the tap of a button. The next big initiative is called Supr Daily. One of the fun facts here is that India is the largest producer and consumer of fresh milk in the world.
There is still such low usage of tetra packets, et cetera, for milk. For years, people have been getting this unorganized way until now of getting fresh milk dropped off at the doorstep. It's actually done at a delivery cost of EUR 0.03 to EUR 0.04 an order. Because of the sheer densities that you get in the business. It also happens to have a frequency of more than 20 times a month because of the sheer utility nature. We acquired this company called Supr Daily, which is at serious scale right now, where we're presenting ourselves as a digital milk solution in the beginning with super low delivery costs and super high frequency, and are then starting to increase the selection, which we are very pleasantly surprised to see how much consumers are able to use it to order other things like bread, eggs, fruits, vegetables, et cetera.
That is about Supr Daily. The last part of the business is Swiggy Go, where we offer our delivery fleet the ability to go pick up and drop stuff inside the city as you would do with a courier service. All of these have been opened up in the last year. We're seeing some very exciting results. Swiggy Stores is at as much frequency as Swiggy, the food delivery business itself. Supr Daily, like I said, is at a 20 times a month and above in monthly frequency. When we see all of this coming together, even at lunch, I was asked this question today, What is your strategy? Are you going to go lower into the lower TGs of India or are you going to do broad? For us, today, we operate in a business that's already relevant for the top 100 million users of the country.
We are at the frequency that we are at. As things go out, China, Meituan just released their quarterly report where they talked about 400, 450 million users having tried food delivery in the last quarter, if I'm not wrong. We're not going to be too different from that. Obviously, the timing is still far away, but even as the India story evolves, more and more people are going to enter into this top of the pyramid, and we want to continuously keep building breadth for this TG that we understand so well that is super sticky on us, and ride this wave over the next 10 to 15 years to build something really large, doing justice to the potential of food delivery. That's a little bit about the Swiggy business. My last slide after this will talk about other stuff, but how is this all possible?
The other big difference in India, and other countries on what the nature of our delivery fleet, of course, they are the backbone of our country. These jobs didn't exist in as much scale even four, five years back. The other big difference is, in the West and in more developed markets, it is actually treated as a casual source of extra income. Some people also say, I want to be active, so let's go take the cycle out, do a few deliveries, make some extra money. In India, it is a serious source of livelihood. A significant part of our delivery fleet actually uses only Swiggy to make money. A meaningful part also uses it in the part-time, whether it's funding their own education, buying a mobile phone that they wanted for a long time, getting their daughter married.
This is a real change that's happening to some of the qualities of lives of our delivery partners. The last part on what are we doing on sustainability and environmental impact initiatives. We are still a five-year-old company. We started the journey closer to the end of the third year, beginning of the fourth year of our journey as scale started to come through. The first one is packaging norms. The other interesting thing about India is that we have the order sizes that we have. The packaging costs are not too different on a global scale. It becomes a huge challenge sometimes as close as 10% of the order value happens to be packaging.
We started working really closely with restaurants and started this initiative called Packaging Assist, where we do group buying on behalf of restaurants and speak with manufacturers directly across the world to keep bringing the cost down significantly while actually offering them access to glass and paper as viable alternatives to a lot of the plastic packaging that otherwise happens. We've already rolled out an option to opt out of cutlery inside the app that helps people reduce their footprint. There's things being done to reduce plastic consumption by developing alternatives like bagasse and sugarcane, which we've started to make some progress with, but are pending on some government initiatives around this segment. The last one is carbon footprint reduction. This has been the latest of the initiatives that we've started working on.
We've done a lot of great work inside all of these hundreds of kitchens that we've set up, where we have IoT sensors measuring and optimizing fuel, electricity, et cetera. We have infrared burners that are also reducing the fuel consumption by 20%. In the last year, we've shaved off the total travel time for our driver by 15%-20%. A lot is happening right now. Hopefully, when we meet again, I have a lot more to show on this subject. Thank you again for listening to me today. That's how we kind of shaped up the category of food delivery in India. The next time we meet, I hope to share a lot more about our foray into convenience and see how we will have pampered consumers silly by then. Thanks again. Off to Larry for the next wave of the presentation.
Thank you. Hope you enjoyed hearing directly from Fabricio and Harsha on their respective businesses. Obviously, they're the real experts. Hopefully got some color on the innovation that they have planned and give a flavor for the strength of their team. Bringing it back a bit, I want to talk sort of what you can expect from us in the future, so I'll start with Swiggy since that's fresh. Obviously, you can hear that Harsha's ambitions and his team's ambitions are not just to build a leading food delivery company. Their ambitions are much greater. Our expectation is not only will they build the leader in food delivery, but they'll also build a top one or two food brands in India alongside the likes of Domino's and McDonald's, and also the future of convenience buying, highlighted by the stores and Supr Daily product. Similar story in Brazil.
Not just building the leader in food delivery, the team's ambitions extend to building a large consumer food brand and basically be present in every meal occasion, in addition to being deeply integrated with their restaurant partners. Back to our group as a whole. EUR 4.5 billion Portfolio of food companies covering more than half the world's population, 650,000 restaurants, and provide work for more than 300,000 drivers today. It's a massive local presence. In the future, we'll continue to grow that presence and also build adjacencies. Our ambition is to turn that EUR 4.5 billion into a EUR 15 billion business in the next five years. Last topic between us and a coffee break. Talk for a second about the Just Eat transaction. Building on the content I just showed. The Just Eat acquisition would create the world's largest and most valuable food delivery business.
Prosus aims to invest and build large market-leading businesses that will shape the future of how people around the world will source, consume, and experience food. As one of the leading marketplaces for food delivery, Just Eat has a key role to play in that strategy. The proposed acquisition would create the largest food delivery business globally, operating in more than 50 markets across the globe, with leading positions in more than 40. It would also consolidate Prosus' ownership position in iFood. The combined business will operate in some of the most attractive food businesses or food markets globally, such as the U.K., Brazil, and India. Prosus is uniquely positioned to unlock Just Eat's long-term potential. Food delivery is going through a global transformation, with consumers continually demanding better service and better selection, faster delivery times.
We believe the best experience can only be delivered via vertically integrated, own delivery-led models, allowing full control over the consumer experience. While historically Just Eat has exhibited profitable growth and built strong market-leading positions, today it is facing significant competitive pressures and requires investment in own delivery, marketing, product, and technology. With iFood, as you saw earlier, it was facing some of the same challenges. We acted quickly there to support investment, reaching more than 20% own delivery share in one year and achieving accelerated revenue growth and positive market share dynamics. We believe our global food delivery experience and own delivery expertise, we are best placed to invest in Just Eat and deliver on its long-term potential. We also have a long and successful track record of working with Just Eat management through that iFood partnership.
Through this proposed transaction, we will back Just Eat's management team and employees and support the next phase of Just Eat's development. We will leverage our global platform as well as our data science and machine learning capabilities to enhance product, service, and supply chain innovation. We believe that with our support, Just Eat's customers will benefit from greater choice and improved service delivery driven by the combined group's global perspective on product and technology innovation across the sector. As always, we will target an appropriate risk-adjusted return on invested capital for our shareholders. Thank you. Thanks. I'll have Fabricio and Harsha come back on stage. We have about 10 minutes, I think, for questions. Yep. Second auctioneer, number three.
Hi, it's Will Packer from Exane BNP Paribas. Three questions from me, please. Could you comment on whether you think you're a better investor or operator in the food delivery space? Are there any changes in the wider competitive backdrop with some of the institutions funding your competitors under a bit more pressure? Is there a change in the competitive environment? Finally, could you just help us think about what makes a good food delivery market? I think in Classifieds, we could point to certain factors like a fragmented estate agency industry. The previous narrative was the inequality between food order size and minimum wage made a good market, but perhaps the recent moves suggest that your thoughts have developed.
Yeah. Okay. Thank you for the questions. I'll rope in Harsha and Fabricio make sense. The first question was, are we a better investor or an operator? I think it's true across the group. We hope that we're good at both. You'll find that most of the folks on our team come from an operating background and apply that learning to investing. Frankly, it's hard to call which is better. I think certainly in the case of food, we have a mixture of both. We have investment positions, but in the case of iFood, we operate alongside management. Second question was about the funding environment and whether that's changed. It's really a market-specific thing, and I think it speaks to probably a broader point about just the nature of competition.
I say broadly speaking, seeing a bit of pullback in spending in some markets. As evidenced by the presentations you've seen, it's important that this space is not winner takes all. Our teams work on the assumption that competition, actual and potential, are everywhere. That's why Fabricio and Harsha and their teams focus on product, tech, consumer experience, because that's the only way to build a defensible business in this space long term. Your last question, remind me.
What makes a good market is people who need to eat.
I think many of the players in the space that start with a marketplace origin would say there are certain characteristics that make for a good market, right? That's a way to run a company. You basically apply your business model to every circumstance where you think it exists. That also happens to be a limiter for a lot of business models. I think the internet has proven ruthless over the years this way. The internet consumer is a ruthless consumer. We start the other way. We know that this model can work everywhere. This is, I think, one of the gifts of this group.
We look for a global consumer need and say, How will this play out differently in different markets? We first got introduced to food delivery via iFood, and we could have said, I worked in marketplaces even back when I had hair. You go, it's hard not to fall in love with those businesses. It's a beautiful business model. If I said, Look, I want to run a marketplace business in India, I wouldn't have a business. We said, Look, let's start with the core consumer need and figure out how we can build a business around that in this market. It's really market dependent. I took a shortcut by speaking at a national level, but it's even neighborhood by neighborhood. The mix of marketplace versus first party can vary. The winning solution can vary.
Just one follow-up on the first question. In terms of investor versus operator, I guess another way to phrase it is, are you happy to stay an investor, or should we think of the aspiration to become the operator in your markets?
Yeah, I think it's a good question. We're happy to be involved in great businesses however it makes sense. In some cases, I think this extends beyond food delivery, right? In some cases, the situation allows itself for us to have owned and operated businesses like many of our classifieds ones. In other cases, we've done well as an investor. I think Bob touched on it in his presentation earlier, the ability to be flexible means that we don't rule ourselves out of situations where we can add value in either circumstance. Any other questions? Next question here.
Thank you. John Kim from UBS. Two questions, please. Specific to your markets, can you tell us about what you think the evolution is in the average order value as you move down the long tail of cities? If I think about the color commentary you've given so far, a lot of the focus has been, I think, eventually on drop density and efficiency on the logistics chain. With the emerging markets, you struggle with order size versus in absolute quantums. Are there levers you can throw here?
Over the last one year, we started to offer much more low entry-level food. There is some reduction of average order value. I think this is super healthy because we are getting much more customers that have lower purchase income. That was the trend over the last one year. We are happy with that. I think this is part of our way to address these bigger markets. Sorry, on the second question, do you want to comment on the AOV or on the second question on the efficiency of logistics? What was the question on the efficiency of logistics?
Sorry. It seemed like a lot of the AI and the detail on logistics was around greater efficiency.
Yeah.
Cost focused rather than revenue focused. Maybe another way to ask the question is can you tell us what's going to drive any improvement in unit economics next three to five years?
It's not only cost versus revenue. It was this is the future where this market is substantially bigger. I need to offer more restaurants that I can only offer if there is 1P. I need to offer better quality to users, and users can track the orders through 1P. I think the 1P is better for everyone, drivers, users, and us. The unit economics then is improving because of the increase of efficiency. The 1P is not only because of efficiency, but the unit economics is getting better every day. I told about 40% improvements in the logistics. The density makes an amazing impact. We started doing delivery like five to 10 km away from the restaurants. Now we concentrate a lot in 1 km, 2 km. This has an unbelievable impact in the unit economics.
I'm very confident that they are going to keep getting better over the next few months as they have been improving over the last year. Very confident on that.
A question. Question here?
Sorry. Hi, it's Marcus Diebel from JP Morgan. Three questions from my side. First question is, where do you actually see in your markets the delivery share going over the next few years? Particularly in both of your markets, have you seen any developments that some marketplace restaurants want now to outsource delivery, including even dark labor, if I can call it like this? Do you see this as a trend that starts to begin? On virtual brands, how is your view on that topic in Europe? Clearly, you must have thought about this also with everything that's going on with the potential acquisition. Some high-level comments, I guess, would be very helpful. Do you see similar developments compared to the presentations that we've seen? Lastly, again, I think the Amazon question, we had the same question in the context of online classifieds.
We heard a lot about the unit economics, and they're clearly impressive. It seems that in some markets, some very big players use food delivery as a customer acquisition tool, and I would care less about the economics at this point, even publicly when they talk about this to investors. How do you see this? Is that something that makes your life a bit harder for a longer period than you might think at this point?
Okay, there's a lot there. Let me see if I got that. The first question was about delivery mix long term. Second question was about the role of virtual brands, virtual kitchens, and third is basically Amazon.
Okay. Starting over the future of delivery.
Yeah. Since you asked, every market will have a very different way it'll evolve. Like I said, food delivery was super small even before Swiggy happened. The market's almost entirely on first-party delivery, with the exception of one or two large national chains that continue to control it. For India, that answer is already decided. It's not going to be Marketplace doing more than a low single-digit percentage if you play out the next few years.
100% is the answer. It's easier.
Yeah. Nearly 100% will be first-party delivery already. Already we are for online food delivery, it's 95%+ .
My one is a little more difficult. I can't give guidance exactly on this number for next year, but it increases from two to 20 from September to September. It keeps increasing, it makes sense that it increase because everything I said, cheaper, better quality for customer, better quality for restaurants. The thing I suggest you to think, many people think Marketplace, you make money. 1P, you don't make money. That's not what we're experiencing. We were profitable in 1P before this expansion we are having now, Larry showed a financial table showing that we can have the same gross margins in both of them. Today, are we losing money on 1P? Yes, we expanded from 400 to 850 cities in 10 months. When we're expanding at this speed, we lose money. As I said, my presentation is not like NGO.
It is a business with positive economics. The 1P will be profitable in the next cycles.
If I can just pile on there. I think globally, the lion's share of the growth from here is going to be 1P, right? The third-party marketplace business has been around for going on two decades, right? If we're going to see more restaurants tooling themselves for delivery, it's probably less likely than just having these delivery platforms layer over the top. Your second question on virtual kitchens, can you-
Just clearly we heard a very impressive presentation, how it works for in India and emerging markets. How do you think about Europe? Given obviously what's currently going on, do you think there should be similar success, or are you less excited on that region, on that topic?
Yeah. It's hard for us to answer that because we don't operate here. I think in general, it makes sense, like as Harsha teed up in his presentation. He wasn't a man looking to go out and build kitchens. He could just see the consumer demand, and it's the gift you have as being the leader in the market where you can say, We need a pizza place in this neighborhood, and if it doesn't exist, I'm going to build it. I think for a lot of Europe, there's an abundance of restaurants. Those kind of opportunities will be narrower than it would be in basically dealing with white space, but hard to say anything beyond that. Then just quickly on the last question on Amazon. Other than the two guys here, he's the sort of best entrepreneur of our generation. He's close third place.
Thank you.
No problem. It's paid placement. You always take Amazon seriously when they consider entering your market. Hopefully, you got a flavor for how specific and special this logistics network is. What Amazon has built is a logistics network to replace a grocery or big box retail experience. If you think about how one might design that network, it's very different than how you would design something that is a perishable good that's got to be in a consumer's hand in 20, 30 minutes. I don't underestimate Amazon, and we don't underestimate any competitors, but it is a different experience to build an Amazon logistics network than a food delivery logistics network. I think I have time for one more question.
Sorry. Hi, Miriam Adisa from Morgan Stanley. Just a question on the sustainability of the delivery fee. Delivery Hero has implemented the strategy of removing the delivery fee in a lot of their markets, and they've said that they can even achieve profitability without it. Just wondering if you share that same view in your markets, and anything you can share on customer sensitivity or the elasticity of demand around delivery fees.
Yeah, happy to, and maybe I can hand to Fabricio. Go on.
Just on this point, I think the whole point of my presentation is delivery fee is a blocker for the customer. If they have to pay EUR 5 delivery fee, they prefer sometimes not to buy because they think it's too expensive. Reducing the delivery fee is unbelievably important to improve the size of the market. I think that's what we are investing technology so much, because we have to make it as cheap as possible. In some products, maybe as Delivery Hero, sometimes you bundle delivery fee with the rest. Then you have to have bundle and put two, three, four things delivered together to reduce it substantially. The elasticity is big. Zero delivery fee or very low delivery fee has a much higher interest from the customer.
That's why I have to invest so much technology to make it as low as possible. That's why 1P is important to me. If it is 3P, I can't control that, and I can't optimize that. Very important that the price of delivery fee, the lower the best.
I'm getting end of Q&A. Time for a coffee break. Happy to take more questions out in the lobby as makes sense. Please be back here in five minutes to three. Thank you. 15-minute break.
Thank you. Bye-bye.
Thank you.
Good afternoon, everyone. I hope the coffee was okay. Hope the lunch was good, too. Before I get going, I need to explain why I have the best backdrop of any of the presenters and why I get to sit on a chair. Firstly, it's because I control the money, so I can do what I want, right? More importantly, while I'm proudly South African, there's a lot of Greek in me, too, right? My mother and my father are from Greece. When you fill a room with as much capital as there is in this room, with a stage like this and a venue like this, and a story like Prosus, I could pace up and down the stage for the next three hours. Eoin told me I don't have three hours.
He says, Basil, you got 30 minutes, I'm gonna make you sit down, so you can wave your hands around less, which means you'll talk less. You will have seen from Laurent, the Southern Europeans need to do a lot of this, the more of this we do, the more we talk. Let's get going then. Good afternoon, first of all, thanks for taking the time to be here. I know many of you have traveled from far, some of you from a bit closer. I see people from London, people from the U.S., lots of people from South Africa, and then people from the East. It takes quite a commitment from your side.
To sit through a day like this when you could be out there making money on the markets, also shows the importance of this event to you, and we really value that you've taken the time to come out and spend it with us. By way of a well, before I start introducing myself, I hope the previous sessions gave you a good idea of our priorities. I hope they were useful. What I'm gonna try now and do is bring all of that together and show you how it's shaped our financials since our last Capital Markets Day, but also how it's going to shape our financials going forward, which is far more important. By way of introduction, I'm Basil Sgourdos. I'm the Group CFO of Prosus and Naspers. I've been with the group for 24 years.
I started off in the division of the pay-TV business as a financial controller, and I've been in my current role for the last five years as the Group CFO. The wonderful thing about working for a group like this for 24 years is that every year is just incredible. We do amazing things. We always take big strides forward, and every year the business gets bigger and more exciting. I can't think of a year that has been more transformational in my last 24 years than what we've achieved over the past financial year. We took significant structural steps, and that changes the Group and who we are and how we think about the future. First, we unbundled and listed MultiChoice Group, unlocking $4 billion of trapped value for our shareholders.
We went on to list Prosus on the Euronext, measured at the day of the listing, unlocking a further EUR 16 billion of value. That combined impact is EUR 20 billion. That is really a sizable value unlock and it dwarfs, in fact, most of Europe's consumer internet companies, if you remember the graph that Bob showed you earlier, right, in terms of Prosus versus the rest. That's behind us, and although took considerable work, it's behind us. We've really got to shift the focus now to the future and a couple of things have happened since then, and we recognize those. As Bob articulated, today has really been about how we're gonna create the next EUR 100 billion, how we essentially going to double our market cap.
I hope I can, with my presentation, give you confidence that that is a very achievable goal for us. I know we've drummed this message into you a couple of times, but I think it's an important message because what it basically is saying to you is that we're starting from a position of strength, right? We have a strong legacy. We haven't just arrived here. We have 100 years of track record of excellent returns, and that, I think, is a strong foundation of which to apply the same disciplines that we've applied to get to this point as we move forward. The one thing that you know as a Naspers or a Prosus shareholder is this group is never short of ambition. It's what allows us to create those returns over the long term.
As you see today, we're putting on the table another EUR 100 billion of value creation. We don't do that lightly. We realize that if we put something like that on the table, we better work damn hard to deliver on it. How are we going to do this? Through a focused strategy. In addition to continuing to support our listed associates who have the potential to unlock significant incremental value, the core of the strategy is around the three segments and the presentations that you saw earlier. They're already very large. They have the opportunity to become even larger because in many respects, they're still very early in the opportunity that they're looking to deliver on. You've seen right through the presentation, very fast growth, not only top line, but also significant profitable improvement.
That's creating the opportunity for us to continue investing, broadening the ecosystems while remaining very disciplined. Now, we have a strong balance sheet of which to achieve our ambitions and of which to deliver that doubling in value, and it's driven by two fundamental things. One is improving profitability at the core, which pushes cash flow up to the center, which increases our financial flexibility, including the ability to take on significant debt. We have a strong balance sheet with gross cash of $8.7 billion and an unutilized RCF of $2.5 billion, which means $10 billion of dry powder. As I mentioned in the earlier slides, the strategy is backed by a legacy of strong execution and return. We've delivered significant progress since 2017. I remember the question earlier to Martin, I think it was.
I think it was from HSBC, saying, Well, what's happened since the last day? I'm going to address that in some detail in the slides later because I think it is the right question. What did you commit to give to us, and have you delivered on that? That's the question by which we measure ourselves every day. We've generated very strong IRRs as Bob has outlined, as Larry has mentioned in food, as Laurent and Martin have also mentioned. We do this in a very successful and repeatable investment process. We don't reinvent the wheel every time. We have a playbook that's developed not over one, two, three, five or 10 years. It's developed over 30 years of investing and disrupting ourselves, and with the primary focus on delivering great value to the consumer. That's our starting point.
Let's look at the business and the financial priorities ahead. Maybe one last slide on the starting point. By being this big top 10 consumer internet group, we bring with ourselves significant scale, and that is a meaningful strategic advantage. It gives us the flexibility to continue to build and support new models, it also gives us sizable engineering scale. Effectively, to deliver the sort of transformation that Harsha, that Laurent, that Fabricio, that Martin are delivering, you need significant engineering scale. That's what our position brings, and it's a significant thrust in our ability to create value going forward. We're delivering some of the highest growth metrics of a company of our size. Top line growth last year was 30%, what you've heard through the day is the ambition to try and sustain that over the long term.
I think we can do so, but more importantly, we can do so and also deliver strong profits and cash generation. We operate in high growth markets that have strong secular growth trends, and they allow us to sustain the level of growth that you've seen so far. Our segments, as you've heard earlier, are poised for disruptive growth across the board. Our core segments, classifieds, payments and fintech, and food delivery, are focused on meaningful structural growth, and particularly on creating significant value for you, our shareholders. Our total portfolio values, including these segments plus our listed assets, is at $150 billion. That's in stark contrast to our market cap, and we recognize that and we live it every day.
This is why, in addition to building these great segments, we need to continue to take action in making sure that the value is properly reflected in our market cap. The addressable market size for these segments is huge. You can see that across the top line, and it's been called out in the presentations earlier. To capture these opportunities, though, you need disruptive products and technology at great scale. That's what we bring with our size, with our experience, and with our knowledge. We believe that if you're an absolute leader, not marginal, if you're significantly ahead of your competitor, you can actually then deliver great returns and deliver some of those industry type margins that we see there. Those type of margins in the scale of the markets we're focused on can unlock significant profits and cash flows over the long term.
If you look at our growth, Bob showed the slide for Prosus E-commerce. What I'm showing you now is total Prosus Group. I show you our growth over the last couple of years in relation to the top 10 consumer internet groups globally, in relation to the top 10 consumer internet groups in Europe, and in relation to the S&P. You'll see that we've outpaced all of those peers over multiple years. Not one, not two, but multiple. If you take it further back, it continues. What's more important when you look at that first half growth is, first of all, remember when we did the results call? We've seen an acceleration Q1 to Q2, in fact, nine percentage points in e-commerce. It's also good to unpack that 20%.
If you look at just the three segments that presented to you earlier today, their combined growth for the first half is 41%. What we know, and you know this better than us, because you're also chasing growth and chasing value creation, growth is scarce, and it's becoming increasingly hard to source. By sustaining our differentiated strategy, we bring to the market something that very few other companies will be able to replicate over the long term. That growth is also translating into a similar track record of profit improvement. That's evident in this slide. Now, what I'm showing you here is profitability improvement, excluding the investment in food delivery.
That has really picked up, as you've heard from Fabricio and Harsha, really towards the end of the second half of last year, and it's really driving at full steam in the first half of this year. You can see we're driving significant profitability improvement ahead of our peers. Let's take a moment again and talk about food and what we're doing there. It's the same playbook. It's the same playbook that we've applied to Classifieds and to Payments in Fintech. That investment is delivering some of the highest growth metrics out there. Not only is it delivering the highest growth metrics, before we start investing, we prove that they could be profitable. You saw that iFood was profitable not long ago, about a year ago. You saw that Swiggy was profitable when it was focused on seven markets, right?
That's what gives us the confidence to now step up investment. As Fabricio articulated, when you look at the earlier cohorts, so as we build out 1P, and you start to look at the earlier markets and how they start to scale, the unit economics are coming down strongly. Delivery costs down by 40%. India delivery cost even lower than Brazil. These are the things that make me comfortable as a CFO to allocate capital to these opportunities. The combination of our starting position, our strong top-line growth, and our significant improvements in profitability are driving strong value creation. Again, we show you invested capital versus the market and analyst valuation of our underlying assets. You see a 38% IRR over 17 years. This is not over one year. This is over 17 years. I think that's quite rare to find.
Of course, Tencent is without doubt the most profitable investment so far in the modern world. Putting Tencent aside, and bearing in mind that these businesses are at an earlier stage of development, we've already delivered a 20% IRR. We've doubled the capital invested in a relatively short period of time. Not only in the aggregate, but each of the core segments. You see that both Classifieds and Payments are delivering 20% IRRs. Payments has tripled capital into the business. Look at food delivery. Why are we delivering those returns? Because we saw the opportunity early, much earlier than many of our peers. We saw a differentiated opportunity to the one that's existed over the last 10 or 15 years. We got behind it early. We spent a lot of time traveling the globe.
I think Larry, Roger, and at the time, the ventures team, they weren't even the food team, were doing more air miles than the combined Delta crew. That allowed us to really go and find differentiated funds behind whom we could put our capital and help them grow and scale. We're very focused in allocating our capital. We focus it around the three segments. Even around those segments, we get lots of inbound. Prosus has become an investor of choice. Why? Because of our long-term vision, because we bring more than capital. We bring capital knowledge and support. We help the founders focus on the customer and consumer experience. In the back end, we help with people matters, financial matters, tax matters, and take all that pain away. As a result, we get 6,000 inbound requests a year. That is a sizable amount.
We spend time thinking about each of those. We decide, based on initial discussions, to really focus on 600. That goes down to 150 opportunities where we start to do fundamental work. We actually get into the business, spend a lot of time with the team, and then when we start to build conviction that this is something we should invest behind, we do very deep due diligence, not just financial, tax, operational, but engineering due diligence. Is the capability here to build a strong AI and machine learning muscle? Is this business open to those type of opportunities? On the back of that, we get to 31 investments. That's a 0.5% close rate. That discipline is reflected in the bar on the right.
What we show you here is the impairment rate since we started to invest in e-commerce in 2008. It's a very low 7%. When you combine a 7% impairment rate with 38% or 20% IRRs in successful investments, the opportunity to create meaningful value for your shareholders is really big. That's what makes me comfortable as the CFO of this group, that our process works, that it's repeatable, and that it can continue to deliver great returns. I said earlier that it's really important that we have a track record of doing what we said, and that's very important to us as a management team. Investors placed faith in our strategy, and it's really important for us to reward that faith with the ability to deliver on the commitments we make to you.
Over the last two years, since our last Capital Markets Day in New York in December 2017, we've been working incredibly hard to unlock the value that I'm going to talk about in the slides that are coming. We've sustained our top line growth. You see there, revenues 28% in eCommerce in the aggregate, but in the three segments that you saw, 41%. We've improved profitability. We've significantly improved disclosure. You've asked for that, and we've significantly improved it, not only around the core business and the metrics and the financials, but also on things like remuneration and governance and how we actually run the business. We're not going to stop here. We're going to keep doing that and keep taking back your feedback and getting better and better at that.
We've also engaged with you very actively on a number of important topics around governance, around remuneration, and that feedback's gone back into the org, and we've acted on it. We have a new RemCo, who's actually made some meaningful changes to the remuneration policy and also worked with Aline and the management team to actually deliver significantly improved disclosure that you've asked for. Very importantly, we've been very disciplined in how we allocate capital and very focused. Finally, this was a lot of work. Do not underestimate the amount of work that went into this, but I'm glad we got it done because it creates a strong platform of which to continue to drive and attack that discount and continue to unlock value for you, our shareholders.
Significant structural improvements that fundamentally change the group we are and give us a lot more tools to actually address things like the consolidated discount to NAV. How do we think about the future? How are we actually going to create this doubling of value creation? It seems like an ambitious goal, but as I unpack it for you'll actually see that it's actually a very achievable goal. I don't want us to put up goals here that we can't deliver on, because that is the wrong basis of which to start a new relationship with our European and developed market investors. There are essentially three levers that we're going to pull. One is we're going to continue to support our listed associate assets so that they continue to grow and deliver value. We're going to take further action to address the discount to NAV.
Finally, and most importantly, Martin, Laurent, and Larry are going to execute on the strategies that they've put on the table here and deliver on the commitments they've made to you earlier in the day. Let's take a bit of time to unpack each of these in more detail. Now, as I've said a couple of times through this presentation, we will continue to take steps to reduce the discount to NAV. This is a top priority for Bob and myself. We think it's one that can unlock substantial value for our shareholders. We've already taken some significant steps in this regard. We unbundled MultiChoice Group, creating a 100% online consumer internet business and unlocking EUR 4 billion of trapped value. We list Prosus, if you measure it on the day of the listing, it's EUR 16 billion of value unlocked.
I'm not going to go and ignore what's happened since. I'm the CFO. I live it every day. It's important to me because it's important to you, right? We recognize that the discount has widened since, and there's been quite a bit of volatility. Much of it is expected, right? It takes time to go and engage a new investor audience. It takes time to build the relationship, to build the trust, to build the confidence. That's what today is about, and it's what we're going to keep doing going forward. We're going to keep going out there, showing these new pools of capital, how we make commitments, how we deliver on them, and how we unlock value. I'm sure as many of you have already done over the last 10, 15, 20 years in supporting us in realizing great returns, they will do so too.
My team and I are working really hard on thinking about how we will go about continuing to drive this reduction around the discount. There's really two levers here, as I've pointed out. One is the financial and structural changes, but most importantly, and as you will recall from the previous slide, it's really unlocking the EUR 50 billion of incremental value from our core segments by driving top-line growth, bottom-line growth, and cash generation, and putting that firmly on our IFRS numbers, because that is something that you can put a good multiple behind and have the value reflected. Let's talk a little bit about our listed assets. Total capital in EUR 1.2 billion, today worth EUR 127 billion. I'd love to have another 10 Tencents.
We're not going to get another 10 Tencents, but hopefully we can get close, and I'm particularly confident that at least on a return basis, we can get to something similar with our core three segments, particularly given the 20% IRRs that they're delivering so far. Market and analyst expectations are for Tencent and the rest of our listed assets to appreciate by EUR 30 billion in the coming years. Our personal view is that they can actually do better than that over the long term. Despite significant macro and political uncertainty that's going around the world, these assets have done actually incredibly well. They've sustained top-line growth, they've sustained profitability, and they've done it in a way that they've actually created flexibility for themselves to broaden their own ecosystems.
Those are going to drive this repeatable model of strong growth, new verticals that will deliver incremental profit, whether you look at Tencent, whether you look at Mail.ru or some of the other unlisted assets that we have. We're very confident that there's significant value unlock to come from here in these assets. Remember, the relationship here is not just about us sitting back and watching how they do. We learn a lot from them. We learned a lot about engineering scale from Tencent. Laurent talked about the opportunity to spend time with WeChat Pay and WeBank and how that's shaping his ideas in credit. We also try and take many of the lessons that we see in traveling and investing around the world and sharing those ideas with them. We believe that that interchange of information makes both sets of companies incrementally stronger.
It's not just about capital allocation, it's also about that interface. It flows both ways. Then let's get to the core operating segments. A lot of focus has gone today into how we're going to create these $10 billion-$20 billion segments, right? To do this, as I've mentioned earlier, and we've mentioned repeatedly through the day, we need to scale fast, we need to sustain leadership, and then we need to expand the ecosystems and drive long-term profitability and cash flow. To give you a perspective on the trajectory since the last Capital Markets Day, the combined revenue growth of the current core segments is in excess of 100%. Look at what Classifieds has done, right? $300 million-$600 million in the first half of this year.
That's massive growth at significant scale when the peers, as Martin showed you, are growing at 10, 15% if you're lucky, right? That's quite differential. It's not only driving top line, as you'll see later, it's also driving massive profitability improvement. That's what gives me the confidence to invest in food delivery. What I see is once the coupon goes away, the consumer stays because we shape the behavior with significant disruption and fulfilling a very unique need. In PayU, we've also seen strong growth, and Laurent's spoken to you about the opportunity to potentially accelerate that growth over time through building out the cross-border business and really getting into the sizable credit market. It's going to take time, right?
He's got his loss ratios down. That doesn't mean now you open the floodgates and you allow a billion Indians to take money from you and hope that you're going to get a 2% loss rate. It has to be methodical. It has to be disciplined. We need to convince the banks that we can do this at scale because they need to bring some of the capital, right? Their cost of capital is much lower than ours. That's what's going to allow us to create meaningful value and drive long-term growth. Laurent's smiling because he's trained me well. If we look at the margins and the profitability improvement, and again, I show you the improvement from the Capital Markets Day.
What I said to you at the Capital Markets Day, if you recall that in a steady state, the portfolio that you saw then was a couple of years away from profitability. That's true. In fact, it is almost profitable. A couple of things have changed. We've decided to broaden the ecosystem in Classifieds, so we're making some investment there, and Martin's given you the rationale behind that. We're deciding to broaden the PayU opportunity, and Laurent's given you a very clear rationale for that. Then finally, and most significantly in terms of capital allocation, we're investing harder behind food. Why am I confident? It was profitable. In fact, at one stage, Fabrice just couldn't invest fast enough to stop that profit growing until we decided, well, hold on here. This is not about one or two takeaways a month.
This is about fundamentally changing the way people eat. Technology and innovation in the supply chains can deliver that. That's what we're investing behind there. Coming back to this theme of disciplined capital allocation. What I show you here is the EUR 10.3 billion that we've invested over the last five years. There's three key things I'd like to call out here. 60% of the capital invested. Excuse me. That's harsh or spicy Indonesian fried rice. I don't know who had that, but I thought it was really good. I ate it too fast. What we've delivered here is 60% of the capital has gone towards existing investees. It's doubling down, having seen evidence of sustainable leadership delivery ahead of the plans on which the investors signed up for. That's what gave us confidence to double down.
I'll take you later through the journey of how we actually scale up that investment. We don't go from 5 to 300, right? There's a journey that we follow, and we follow it repeatedly for each and every segment. The second thing I want to call out is that 85% of the capital has gone to these three core segments that we've invested today. This is over five years. If that isn't discipline, then I'm not sure what is for a group this scale, right? It's 85% of the capital to these three core segments. Then, of course, we always have an eye to the long-term future, and 9% of the capital has gone towards ventures. There's really two arms to the ventures focus. One is building on the extremely strong track record we have in India.
We've been in India for 15 years, before everyone started arriving three years ago. We've unlocked significant value in India, right? Just through travel, the IRRs there are about 24%. The IRR on Flipkart is even higher, right? We've been around for a long time. We built a strong brand by backing founders, by giving them the support that they need to build wonderful businesses in this great market, and that's creating meaningful value. That's what we're doing, again, with our ventures team in India. Secondly, we're investing small amounts to try and see whether we can unlock the next segment. Remember, food delivery didn't arrive as a segment. It arrived as a ventures investment that then allowed us to build the confidence to actually create this sizable segment that you see today.
The combination, again, of that disciplined capital allocation, strong top line growth since the last Capital Market Day, and significant improvement in profitability, has resulted in 60% value appreciation of the three core segments. Put Tencent aside, put Discount Unlock aside, just these three core segments have delivered EUR 7.2 billion of value in two years. It's going to probably be quite hard to find that in the European context, right? Again, it's what gives me the confidence to invest behind opportunities like this. I think Larry's story was incredibly clear to me. We're investing in the food ecosystem that adds significant value to consumers, to restaurant partners, and as Harsha and Fabricio explained, creating meaningful employment opportunities. The offering is transforming how we eat. It's not about 1.0 and a couple of takeaways a month, pardon the pun.
It's about fundamentally changing how people eat and getting that up to 15, 20 meal occasions a month. It's possible. There are markets that are doing that. Meituan in China, then we're also seeing similar trends in Korea. I think at the core, Bob says as well, I'm going to try and paraphrase. Normally, it doesn't go well when a Greek tries to paraphrase something that a Dutch person says, let me give it a go. I think if you deny the consumers the opportunity that they so desire, purely because it's too hard to innovate and purely because you don't want to go and disrupt a great business model, you're going to get wiped out. That's the Greek paraphrase. Bob says it far more eloquently than me. You're going to get wiped out. We've seen it again and again.
You can go and look back 30, 40 years in history, it's happened, and it's going to happen again. You've got to think about what consumers want. You've got to invest behind that innovation. You've got to stay very close to the unit economics, so you don't go to Fabricio. There you go. Take EUR 400 million. Come and tell me how it went in five years. I'm on Fabricio's back every month, every quarter. We fly to Brazil, he flies to us, and we really spend lots of time trying to make sure that this is actually delivering what we think it can. The journey to building a segment is a very repeatable journey. I've taken the classified segment as an example because it's our most developed segment, and really, it's the same approach that we've also delivered for payments in fintech.
What we do is we identify trends early, and that's because, again, of our global presence and our scale, and the fact that we get 6,000 inbounds a year, and that we are an investor of choice. We focus on shifts that will transform the lives of people in high growth markets. Then we make small investments to test our belief. We learn and we build conviction by backing local champions with very strong entrepreneurs. You saw three great examples of the type of people we like to back. We then build conviction. How? By measuring what they're delivering against the original plan. By looking at whether the leadership is sustained through innovation and disruption, and not just by couponing, as Larry called out earlier.
Once we see not one month or two months or three months of track record, once we see one year or two or sometimes a bit longer, that's when we start to step up. What we do is we'll push hard to drive scale. We push hard for them to think about a broader ecosystem, and then ultimately to get to strong profitability and cash generation, as you've seen in the classified model. That's taken a business that took EUR 5 billion of capital investment over seven years to a business that has delivered EUR 12 billion and a 22% IRR. As Martin outlined earlier, the opportunity to take that to EUR 20 billion in the coming years. That's the same journey we're following with food. Food is a large and basic human need, as has been called out.
People are going to eat, but there's lots of inefficiency in the process. Think about it. The vegetables get farmed, they go to the supermarket. The supermarket needs its own brand, its own position, because that's how it feels important. Then you'll go pick it up or the restaurant will go pick it up. Then they'll cook it, and everyone's signing up 10-year leases and significant There's so much inefficiency in that value chain, and it's just prying for disruption. You need things like data. You need things like algorithms. You need things like the things that Fabricio and Harsha are doing. We started early. We, in fact, started with small venture investments, a couple of million dollars here and there. First EUR 2 million towards iFood. Fabricio says, Guys, I think we can do something. We said, Fabricio, what are you talking about? People are faxing in orders.
We're a tech company. He said, Basil, we're going to change that. I'm not asking to invest in a business that's going to take faxes all year round. We're going to fundamentally disrupt this business with our tech, with our knowledge, with our engineering scale. We gave him EUR 2 million. He came back. He said, There's EUR 40. He was then profitable. I was shocked. I was going, What's going on? Fabricio, why aren't you asking for more? He says, Well, that's about where we can go. We invested in India. We started to see different things. We spent a lot of time with Meituan and also learning from Delivery Hero and what they're doing. That's what's created the ambition today.
Now we're in the part of the journey where we're doubling down on our existing investees and looking for good opportunities to build similar businesses in other markets. It's not all about investment. You can't invest unless you have the right financial flexibility. It's also important to generate profits. You need to strike a right balance in your portfolio. What we show you here is the improvement in profitability of the internet businesses or the e-commerce businesses that are already profitable. More than 50% of our revenues come from profitable businesses, and that percentage is growing quickly every year. At the time of the Capital Markets Day, I think it was just under 40%. That's driven, again, by the scale that's been created.
That profitability is driving increased cash generation to the center, which combined with a sizable dividend, gives us significant financial flexibility to take on debt and to continue to invest. What's also very encouraging for me is that the cash generation to the center from the core e-commerce portfolio is growing meaningfully faster than the Tencent dividend. It's encouraging for two reasons. One, it shows that we are going to unlock value with e-commerce through improved profits, through improved cash flow. Secondly, it's encouraging because Tencent still believe there are opportunities to continue to build new verticals and new drivers of growth, and we absolutely agree with that. I think their model is quite unique.
If we look at our starting position, we have $8.7 billion of gross cash on the balance sheet and the $2.5 billion RCF, which gives you the $10 billion of dry powder. Our intention is to fund the Just Eat transaction primarily with debt, and we can do so and still remain comfortably within the investment grade rating. Some of you, looking for where they are sitting, have asked me, Why investment grade? Why is that important to you? For a couple of reasons. Investment grade rating allows me to raise the maximum amount of debt at the lowest cost of capital, right? By lowering my cost of capital, I lower my WACC. By lowering my WACC, I also unlock value for you, my shareholders.
Secondly, we are a business that keeps growing, so we need to keep a healthy balance sheet, right? Going and levering this business up, comes with a couple of risks. Because of the significant improvement that we've made since the last Capital Markets Day, our ability to add incremental debt has increased significantly, right? This is why we feel comfortable that we're able to fund most of the Just Eat transaction with debt. Let's round it up with the last couple of slides. What can you expect from us going forward? Simply, we want to drive scale and profitability in the core classifieds and payment of FinTech business. We're going to invest to scale food delivery, but certainly I would want to see very strong profit and cash flow generation in the future there too.
We're going to do this by leading in innovation, as we've done over the last 10 years. We've led in mobile. We led in that transition versus our peers. We're going to lead in AI and machine learning. Why? Because we have that engineering scale that many of our peers just don't have, and we're able to deploy it to very unique and local problems, as Fabricio demonstrated earlier. In going down this journey, we're going to remain very disciplined in capital allocation. We're going to continue to focus on the three verticals. We're going to look for new early opportunities in India, hopefully with small investment, uncover another segment that we can excite you with. The bulk of the investment is going to go into people, into engineering scale, because that's what drives differential innovation.
Importantly, we're going to take further structural and financial action to unlock the discount. With that, I want to close my presentation. I want to thank you. Many of you are long-term shareholders, and we know you have many choices around which to allocate your capital. We value the trust that you put in us. We understand that that trust means we've got to deliver on our commitments, and that's what we intend to do. I'm going to pause there, and I'm going to invite Bob to join me on stage for the Q&A. He's going to be on this side, right? Thanks.
All right. Hey, Basil.
Hey, Bob.
You have a good time?
Yes, excellent time. Did you have a good time? Maybe. Sort of.
Excellent. Oh, by the way, if there are specific questions that you didn't get a chance to ask during the segment presentations, most of them are still sitting over there. If we get nervous about the specificity of the question, we'll punt to that side of the house.
Great. Maybe just to get started, it is Andrew Ross from Barclays. I have got three. First one's on the value target for classifieds going from 12 to between 15 and 20. I am computing that's an IRR kind of in the high single digits. The first question is, why is it not more? Second question on your kind of next EUR 100 billion of value creation. Most clearly about EUR 50 billion of that coming from reducing the discounts. Anything more specific you could elaborate on in terms of what measures you are thinking would be very helpful.
Third thing is also related to the discount and maybe any more color you could share with us in terms of how you're thinking about why the discount has widened since the Prosus listing, and we're now at a point where we're pretty much back to where we started in March, and how we should think about that.
Yeah. I think your three questions, one is around IRR for classifieds. I'll ask Basil to comment on that first. The third question was around what happened to the discount. I think your second question was around value creation beyond in the core segments, right? Did I remember them well? Basil, I will ask you to answer the first two, but I'll start with the third.
Go for it.
I think what we were reasonably clear about when we did the Prosus listing, was two things. One, we didn't expect it to be panacea, right? We expect for us to have to continue to make structural steps to address the discount which we are committed to do. I think the second point, which we, I think also we're relatively clear on in advance, is that there will be a certain amount of turbulence and volatility in the short term. I think what surprised me personally was, first of all, when we put forward to our shareholders the proposal for the Prosus listing, there was an overwhelming support, right? It's more than 95% of shareholders were supportive, but also then the election, since the initial listing went so well, I think many people chose to get Prosus shares.
Some of them actually can't hold those shares long term, or I just said wanted to lock in a short-term return. I think that volatility was expected. Let's see how it settles. I think what we have been actually very positively surprised by is the amount of interest we're getting from serious European-focused investors. I think that will play out well over time. You know by now we're committed to addressing this. We've done, I think, some very meaningful things, and if we see this persist will continue to take action.
On the first question, what Martin's given you is an ambition around the core. Remember, you pressed him on convenient transactions. How big is the model going to be? How big are the margins going to be? That's not factored in there. Importantly, what we've all learned in terms of Basil is when we create an expectation, we don't want to just hit that expectation, right? The ambition is to go beyond that. It's not insignificant to go from 12 to 20, right? That's EUR 8 billion of value unlocked. The IRRs are still very good on that. They may not be 22%, but they're still very strong. There will be opportunity as the ecosystem evolves, as convenient transaction evolves to create further value.
If I would summarize Martin's performance in one word, it's overperformance. Do you agree, Martin?
No pressure, Martin. We've just upped your level of ambition. There's one here, and then there's another one behind, and then we can come around. Yeah.
Thank you. That's Silvia Cuneo from Deutsche Bank. First question, you mentioned you can take further financial actions to unlock value. Now that you are 100% consumer internet group, I guess it's not as easy as probably the choice with MultiChoice. Would you be interested in potentially listing part of your stakes in some of your internet businesses in the future? Just in terms of capital allocation, should we expect you to focus more on the existing three segments or more on the ventures?
Thank you for your questions, and also thank you for limiting it to two, because two I can actually remember. If you come with four or more, I'll probably go off the rails. I'll ask Basil to answer the first question, which is around sort of what other structural action could you take beyond where we are today? I can say a little bit more about capital allocation. I think one of the slides that Basil presented was around how we've actually allocated about 85% of our capital to our core operating segments. Again, it's very hard to predict future M&A in particular. I can't say much about it. What I can say is that the vast majority of the available capital that we have is most likely to go to our existing segments because this is really important for us.
I think, Basil, you mentioned it, but I'm just going to stress it. When you see us write significant investment checks, it is because we have a very high level of conviction around these businesses, right? We've done significant investments in classifieds and in food, and they're always on the back of seeing patterns that we've seen before, seeing companies that we understand at a deep level, seeing entrepreneurs that we've seen deliver time and time again on their plans. I think that logic applies to future investments as well, and that will bias our firepower very much towards the existing segments where we have the expertise, and we're comfortable that we're going to get a great return on what we invest.
To your first question. Most of the businesses we get into are not listed, right? We, in fact, have created many listed companies in the process. We got into Tencent before they were a listed company. We got into Mail.ru before they were a listed company. We got into travel in India before they were listed. We list internet assets, too. The conditions for the listing need to be right. It needs to be not only about getting the market to put a real value on the asset, but it needs to be in a state where the listing doesn't become a major distraction from the strategic priorities, right? Managing a public company takes lots of time, lots of effort.
Really?
lots of engagement with shareholders.
Really?
I'm a bit grayer, and my beard's a bit longer from two years ago. We don't want to inflict that on someone unless they're ready for that responsibility. Particularly when given our businesses, they're much earlier stage and with significant growth. It's hard for them as a standalone business to have the same financial flexibility. I think that's some of what holds back some companies that actually list too early. We will list businesses definitely, but we need to list them at the right time for the right reasons and under the right conditions. I think, yeah. Sorry, we had one here, and then this gentleman's just put up his hand a couple of times.
Hi, Ken Rumph from Jefferies. A couple of questions. Firstly, maybe it's a question for Harsha and Fabricio. Where do iFood and Swiggy stand in terms of their funding needs and sort of when another round may be required and so on? Secondly, to go back to the group as a whole, thank you firstly for kind of setting out a target. You had the kind of EUR 100 billion, EUR 50 from the core pillars, EUR 50 from, as I recall, the growth in your listed investments plus discount reduction, and you flagged the analysts who are always right. I think that they're going to go up by EUR 30 billion over the next 12 months. That leaves kind of EUR 20 for the discount. I don't know that that's correct arithmetic, different periods and so on. One question, sorry, was, is that the right way to think about that?
Final one is on the exciting topic of buybacks. Perhaps to try and present it in a more helpful way for you, why would buybacks not be a good idea? I think you put some cogent arguments forward in New York two years ago about why that's not necessarily the perfect answer. Thanks.
Okay. Let me try to recap the questions. The first question is around funding for Swiggy and iFood, I'll actually answer it for them, and feel free to grab Harsha during the coffee after. The questions around value creation in, say, the other 50, I'll ask Basil to cover as well as the last question, if you're okay with that. I think if you look at the history of iFood, right? We've been the controlling shareholder there for a while. We have, I think, consistently invested in the company and given the company everything it needed to succeed. That, I think Fabricio would even Fabricio, can you nod if you agree? Yes. Fabricio put up a thumb. I think that situation will continue. We think it's one of the most exciting food delivery businesses in the world.
It has a fantastic market position, not only where it is today, but I love how Fabricio is innovating and making this really not Food 2.0, but Food 3.0, and we'll continue to support him in that journey for sure. I think when you look at Swiggy, again, I'll speak to what has happened in the past. We've been around from a very early stage when I think Harsha was just present in seven cities, and we've been supporting that business consistently since. Again, if anything, I would say about what I've seen Harsha and team do is actually out-innovating what I expected from this group of people. I was just telling this story over lunch that made a huge impression on me. It was in India three weeks ago, and I was sitting at a government minister's office to have a chat about our investments in India.
Every time you go to a government minister in any country, you always have to wait. That I can promise you, that's guaranteed. Doesn't matter where. We're also waiting, and we're sitting actually surrounded by about 10 people of the staff of the minister that the staff was going to join us for that meeting and had some time to kill. I asked them, Do you ever use Swiggy? I thought I'd make use of the time I sit here now anyway. They said, Yeah, I Swiggy it all the time. These were, in many cases, people who were in their late 50s or 60s. For these people, it had become a habit. It really had become a habit to order food for breakfast, for lunch, for dinner.
I think Harsha is actually really to be commended to take the model almost to a level where I thought it wouldn't get to in a certain amount of time. We'll continue to support him with that in the future as well.
Ken, to your first question around the math, you took the 50 minus the 30, that's 20. That's the math on the slide, yes. The world's very dynamic. Our world changes regularly. As I've said, the same that I said for Martin holds for me, too. I want to over-deliver, and some things I have more control over, other things I have less control over. Where we can, we'll work harder. On buybacks, the challenge we had at the time in Naspers was the following. We have businesses that are delivering 20% IRRs. If you take a five-year view, even with the discount where it was at that time, it still made sense to invest in the business. Unfortunately, the company didn't have sufficient financial flexibility to do both.
The ambition is to get Prosus to that level over time, and we will, through this continued improvement of profit, but in cash flow, so that we can do both. For now, we have meaningful return opportunities that we can invest behind and unlock meaningful value. This change that we've made in the order of things, in terms of how we've created Prosus, now gives Naspers incremental flexibility. That's well recognized. That's one of the things we've said when we actually went and created this transaction. My ambition is to be able to do both because that's what shareholders want. They want us to deliver good returns and return capital to them. That is the ambition and that's what we're focused on.
There's a question there. Yep. Over there.
Hi, Masha Kahn from HSBC. Can we come back to my first question about IRRs? I think in the last investor day, you showed 15% IRRs in 2017. This year you're showing 20%. Can you talk a little bit about how your latest investments are driving better IRRs? Also, I understand this year's is excluding impairments. If you could just give us like for like.
Yeah.
That would be great. Second question is on payments. How big can loan portfolio become? I read some articles talking about $1 billion. I'm just wondering whether you want to involve bank partners or hold that risk on your books. Thanks.
Yeah. Maybe Basil and I will tandem answer on the first question. I think I'll give a few examples on what has pushed those returns in the right direction. The specific question around comparability, I'll leave with Basil. Laurent, if you won't mind, because you, I think I've heard you explain how we want to evolve our mix to involve more bank funding over time. I'll ask you to answer that question. I think if you look at two years ago versus now, I think we've locked in a number of very significant returns. One was our Flipkart sale, right? That's obviously delivered a very significant return at scale that has helped us.
I think the food delivery investments that we've made, I think Larry showed a 30% IRR on our food delivery investments, and that obviously is also at some scale that makes a difference to those numbers. What we've at least been so far able to do is invest the most recent capital at very good returns, and that, I think, has been beneficial for us. Basil, maybe you can cover-
Yeah
the specific point around data.
Yeah. Maybe just to elaborate a little bit, Masha. When you're doing things at scale, right, and you're broad in the ecosystem, the risk profile goes down, right?
Yes.
10 years ago, we were still trying to figure out things and really, now we have a sustainable position and engaged user, and we're building around that, so that drives returns. In terms of the comparable figure, after sales and IRRs and that, it's about 17%. That 20% that I showed for the core segments is about 17%.
Laurent?
Yes, I'll take the question on the loan book. Yes, 1 billion is actually the number. The question is when. Three years from now. Okay, Basil? The ambition, USD 1 billion loan book three years from now. What does it mean? Steady state for us. The mix should be really 70% co-lending with the banks, 30% equity. All right? The way you get to the equity is actually you don't have to put all equity yourself. You can leverage, right? There's a limit to how much you can leverage. 3:4, that will be the ratio. All right? At the end of the day, USD 1 billion loan book, USD 100 billion of pure equity, leverage, 70% co-lending. We already have actually lines of debt, negotiating with the banks, Kotak, HDFC, et cetera. We will expand that. That's the plan.
Thank you, Laurent. One over there.
Hi, Michael Willar from Stenham Asset Management. Just a quick one on capital allocation and the discount. When you try underwrite future IRRs and you look at your different verticals and asset bases, do you perhaps see better rate of return on food than Tencent's? My sense is that you do, or maybe that's a byproduct of you not talking about Tencent's. If you do, why not sell Tencent's and recycle that into food?
I'm happy to answer that question. I think what we've seen so far in food is an exceptional IRR, right? We had a 30% IRR over our investments there. I think the reason why we have been, I think, good at it is by developing expertise, knowing where to put the capital, and helping companies to invest it in the right way. I think that's what we've been doing. If we see further opportunities to do that, we will do it. I think as Basil also said, we actually have the financial flexibility to do that without selling Tencent shares. I think in my introduction today, I was appropriately bullish about particularly sort of the medium long-term potential of China, right? China is by far the largest internet market in the world.
It's growing fast. It is, in my view, and I spend a fair amount of time there, also the most innovative internet market in the world, where Tencent just has a phenomenal position in terms of their share of the Chinese internet consumers' time spent. If you look at the number of hours that a Chinese internet consumer spends on mobile internet, Tencent has more than 50% market share of online mobile time spent. That number has no equivalent in the Western world. Tencent has a truly exceptional position in what is, from my point of view, clearly the most attractive internet market in the world. What I also feel quite strongly about, having spent many years together with them, they're led by the absolute best team in the internet in the world.
If I take those factors combined, I believe that team will deliver a great return for us going forward. I have a lot of confidence in that.
Well, let's just give some other people a chance. Yes, behind you. Behind you. Yeah.
Gent. There was a memo sent out not to ask any questions about Just Eat, but if there was, I didn't get it. If you don't mind, I think we've had a fairly compelling rationale as to why your offer is attractive to Just Eat Takeaway.com shareholders, compared to the Takeaway offer. I haven't yet heard a convincing rationale for long-term Naspers shareholders like ourselves as to why, at this time, this is the right use of capital. It doesn't fit the playbook, as far as I can see, that you've talked about earlier. It's a lower growth market, more competitive, seemingly a turnaround story to a large extent, with a management team that you say you back, but you obviously feel that they've made some execution errors in recent years.
If you don't mind just expanding on why, as shareholders in Naspers and Prosus, we should be excited about this opportunity?
I'm happy to answer it as well as again, and Larry, feel free, grab the mic and feel free to chime in. The reason why we're interested in pursuing this acquisition is obviously because we think we can deliver a good return for our shareholders. In the end, there's nothing we do, there's no investment we do where that is not the first and foremost question. I think the reality of our experience in food delivery is that the growth opportunity is just considerably larger than we thought. That holds in our growth markets, and I think you've heard Harsha and Fabricio and Larry speak about that quite eloquently.
Even in more what you would consider mature markets, I think with what we've seen in India and in Brazil and in other markets, like what I would call Food 3.0, I think all markets that you would consider to be mature now are in fact growth markets. I think you need to play your cards right, and you need to do the right investments in technology, into products, into delivery to get there. I would say there's, at this point in time, no mature food delivery markets. I think that's very consistent with the story I told earlier today. We're not a developing market investor. We're a growth investor. If we see an opportunity where we think there's a very significant growth path from there, we will invest also if it's not in a market that you consider to be a growth market. It's about return.
We think we can do it at the bit where we've put ourselves out at, and we know how it's possible to grow significantly in the space. Larry, have I missed anything?
No.
Next question. Yeah.
Hi. George Garside from City of London Investment Management. I have a couple of questions. The first one is on, really profitability and the capital intensity of your businesses. You've talked about three initiatives that lead me to believe that you're going into a higher capital intensity, namely, the convenient transactions in classifieds, credit in the payments business, but also the 1P model in food delivery. I would like to hear your thoughts in terms of how these two reconcile. Sort of your focus on returns, but also potentially higher capital expenditure that these businesses require. My second question, I'm afraid, is again on the discounts. What we've seen since the listing of Prosus is that a big discount has opened between Naspers and Prosus.
I would like to hear your thoughts on that, and specifically, what measures you would eventually take at the Naspers level that would sort of align the valuation of the two companies.
Thanks a lot for your two questions. Your first one is around sort of deepening investments in our core segments and what does that mean, and what does it mean for returns. I'm happy to answer that, and then I'll ask Basil to answer your second question around the discount at the Naspers level. To your first question, I think the investments in convenient transactions, 1P food, and credit, I think have one thing in common, or actually have two things in common. Maybe even have three things in common. One is that we believe we're going to get a fantastic return on those investments. Maybe I'll take the example of convenient transactions if Martin will allow me. The synergies between convenient transactions and, say, the normal cars business we have are tremendous.
If you ask one of these convenient car guys, like Suresh, who is the CEO and the founder of the Frontier Car Group, their number one cost item, which is in many cases maybe up to half of their cost, is marketing. The number one growth constraint is in fact the number of leads they can get. The moment you put these businesses together, you take away half the cost base because you no longer need to pay for marketing because we actually own all the people who want to sell their cars already on Classifieds, right? You have a massive impact on the cost structure of a convenient format, and you also can deliver them even many more leads than they can handle typically. The return for us in investing those kind of businesses, I think is going to be fantastic.
That's also why I'm relatively comfortable that Martin is going to over-deliver on his ambition. We'll invest some money in that space, but I think it's going to be an exceptional return for the group, and that's why I think we should do those kind of investments. I think first-party food is actually very much the same story, right? The opportunity in food, I think, is a multiple of what we thought when we were still looking at the early days of food 1.0, which is basically the marketplace model. We then basically have a discussion with people like Fabricio, say, Look, we think you're right, based on what we've seen in India and some other places. We think the opportunity is much bigger.
Do you think you can get a great return on it? He proves to us with his business plan, and he's delivering on it, that that actually will have a good return. I think it is all born out of a, we have ambitious entrepreneurs that run these businesses, ambitious CEOs like Martin, who see a high IRR opportunity and say, Hey, we think we should do this. In the end, convenient transactions will be profitable. 1P food will be profitable, and credit will be profitable. That's why we do it, right? I think, did you say that, Fabricio? We are a for-profit business, and we do understand the value of cash. The reason why we do it is there's substantial return to be made. In the process, I think you also make these businesses more future proof, right?
You create an ecosystem that becomes quite ingrained in the real life of people, and that becomes really hard to disrupt over time. It's a good IRR in itself. It actually is what customers want, and it actually strengthens the business you have already. That it requires investment is, I think in our case, is we would love everything to be profitable on day one. That would be a lovely world. That's just not the world we live in. I think historically, we've created tremendous value for our shareholders by taking that long-term view and investing in great models.
Yeah. Before I get to your question, from a financial perspective, how do we do it? When Fabricio comes and says, Give me EUR 400 million, I say, Give me the plan. Then after one year, I say, Give me the plan again. I compare that to the plan he put forward, and I measure against the performance. We have a thing called a prediction grid, and you can see winning teams, right? You can see what they do is they hit those one, three, five plans consistently year in, year out. It's only on the back of that over delivery do they get more money. Those plans, as Bob articulated, have to have a good IRR. That's the starting point.
They get interrogated not just with one market perspective, but with a 90 market perspective, because I've seen that type of business in several other markets. I can pick up if there are meaningful inconsistencies that don't give me confidence that we can do this. Coming to, again, back to the discount question. Absolutely, the discount is wider at Naspers, so there's greater value unlock opportunity there. What I can tell you is this is not a byproduct of our daily work. This is a significant amount of the work that I and Fahd, our CIO, and my finance team and the core management team spend over a week. We have not one, several things we can do.
I think it wouldn't do you justice and wouldn't do the plans that we have in place justice if I went now and said, Well, it's these 10 things. I want to be absolutely sure what the right thing is, not just for Naspers shareholders, but for Prosus shareholders and for the long term. When we're ready with that, we're going to come back, and we're going to start executing on it, and we're going to keep iterating. This is not something that's going to get solved in a month or three, right? It's going to require continued steps, continued action. We'll get there, and we now have tools. We didn't have tools before. Sorry.
Hi, it's Will Packer from Exane BNP Paribas. A couple from me, please. You've put up a couple of numbers on long-term IRRs, but if you read the footnotes, they kind of exclude the bad stuff. Could we just have the IRRs including
I called it out earlier, Will. It's 17%.
That's for the 10-year period. I saw I was confused there.
That's everything. That's since we started e-commerce.
Including the Tencent investment?
No. Including the Tencent investment, it's about I don't have the number. I think it's about 35 odd.
Five, I think, yeah.
35 odd.
Just secondly, thank you for that. Should I interpret your comments around Tencent that unless the share price meaningfully goes up from here, that you're committed to the current stake?
We are committed to the current stake. We are very committed to Tencent.
There's a question back there, and then there's one there. We'll do four, and then we'll do three.
Hi there. Thank you for everything today. Sorry, I'm from Brummer & Partners in Stockholm. My name is Adam. I have a question regarding the ownership situation in Prosus, and it's my understanding that could change over time. Are there any sort of timelines which we should be aware of for that to happen?
Could you clarify a little bit what you mean?
So today-
Naspers' ownership in Prosus, right?
Yeah. Exactly.
I don't want to speculate, right? If that ever did change, it would be done in a manner that is thoughtful and considerate to Prosus, because whatever Naspers did there, it would still be the biggest shareholder in Prosus. It wouldn't do anything to destroy value at that level, if that's the question.
Yeah. There's no official locking periods or anything that has been communicated. It could be asked when communicated.
Yeah
you know that there is a two-year lockup or anything like that.
No.
Yeah.
There are no formal limits on that. There are some tax consequences if you would hit certain points. There's no specific restrictions on that.
Yeah.
That is correct.
I'm the CFO of a public company. I understand the impact of those things. We are definitely going to be very considerate and thoughtful there.
Thank you.
Hi. Pamela from LGM Investments. I was just wondering if you could expand a little bit about how you think about debt at the group level. I saw a slide in one of your previous presentations where you talk about how much cash you have, but also the market value of your listed assets and how that's a cushion for your ability to take on debt. Obviously that situation is current, and in tougher times, you may not have the luxury of having that cushion of the valuation of your listed assets. I was just wondering if you could touch a bit on how you think about what level of debt you would be comfortable with in a business where a lot of your assets are loss-making and not generating a lot of cash flow.
I'm comfortable that we can fund the Just Eat transaction with the amount of debt that we've indicated on the slide, and that there's sufficient cushion to make sure we remain at investment-grade rating and therefore keep our funding costs low. Is there room to do more? Yes. Are we going to be sensible, taking into account where things are, where the investment profile is, where listed assets might move, where markets might move? Absolutely. That comes into the equation of deciding how much we can push the needle. I don't want to give you an absolute number, because the world is fluid. Debt markets, capital markets, listed markets are fluid. I also want to do it in a sensible way such that I don't have an event either for my debt investors or for my equity investors.
Yeah.
I always make sure that we give ourselves good flexibility.
Maybe to the last part of your question, when we look at our listed, you said, we're comparing our levels of debt to the market value of our listed assets, actually, our listed assets are profitable, right? Tencent is a very profitable business, and Mail.ru is a very profitable business as well. Those businesses, I think, don't fall in the category of loss-making business, just to be clear.
I saw another hand earlier. We are going to be outside afterwards, so if you prefer to I know some of you prefer the closer, personal discussion, and we are happy to do that with you as well. We are going to be outside for a short while, too.
Excellent. Unless there's a last question anywhere in the room, I think I just wanted to close off briefly. We are actually, as Basil said, going to spend a little bit of time outside the room. If you want to grab us one-on-one and actually ask any questions that you want to give us directly, don't hesitate to do that. When I think about the year that was, it was for us as a group, an exciting year, right? We became 100% consumer internet group. We got Prosus listed on the Euronext in Amsterdam. It's been an eventful year. I think where we are now as a group, and I hope you'll agree with that after seeing everything you've seen, I think we're in a position of strength in terms of our future growth.
I feel really strongly that the intersection between growth and technology and growth markets that we have invested in is going to deliver a very compelling future. I think we're well set up to deliver that next 100 billion of value. I hope you also feel from us that we have, and everybody, and I'm not talking about just us, but everybody in this group has the mindset to create value. We want to build great businesses and deliver great value for our shareholders. That will be front and center for us, and I hope you agree with it. I think the individual business that we're in, and I hope you've seen Martin's enthusiasm. I'm sure you've seen the enthusiasm of the other presenters as well.
We are in very exciting business models that have a tremendous amount of runway. If anything, I'm even more bullish about the future of these operating segments than I've been previously. Maybe one of the things that really matters to me is that innovation is at the core of what we do. I actually got asked a question by some people over lunch. They said, What keeps you awake at night? I think there's only one thing that would keep me awake at night, and that's being out-innovated in our core businesses. The one thing I know about the business models that we're in today, in 10 years, they will be disrupted as well. If you hear the team speak about how they think about their business, it's not one of static, Hey, we're going to make lots of money. Everything's fine, right?
It's all about what's next. What do our customers want? How can we be better? I think that's fundamentally what I like about this group. The group exists for 100 years, has seen many changes in technology, we've always come out stronger rather than weaker. We have, I would say, almost a paranoid innovation mindset. If you speak to anybody on our board, I think you'll get the same feeling. Our leadership team and our board is one that totally acknowledges that all business models get disrupted, we will be a disruptor in the long term and not a disrupted company. I think a final point is we have an ambitious growth agenda. We have the funding to do that, we are absolutely committed for every EUR we spend. We know it's your money. We'll spend it well, we'll get a good return.
I think the discussions we have as a team are always when we invest around making sure we get an absolute excellent return. If we have any doubts about it, we just don't do it. Maybe the final point, you've given Basil already lots of questions about it, but I'll repeat it once again. We are 100% committed to narrowing this discount. We don't like where it is today. We think there are market reasons for it that may or may not settle, but we are committed to do something about it. I hope you have seen in the actions that we've taken in the last few years that we take this damn seriously, and we take action to do something about it. With that, I'd like to close off where we started today, thanking you all very much for your time.
I know you have many things that compete for your attention, we really feel privileged that you actually took out a full day from a busy schedule and in many cases, even more to travel here to hear our story. Thank you very much for your time and attention, I look forward to seeing you again soon. Thank you.