April 20, 2015

NGP Capital’s global thematic strategy in action

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By Anupam Rastogi – In one of the largest Internet deals this year, China’s two leading local marketplace platforms Ganji and 58.com are combining forces to form a local services behemoth. NGP was an early investor in Ganji, and co-led an 18 million series A investment in 2010. As reported in the media, the deal values Ganji at over $3B. This is a tremendous validation of Ganji’s founder Mark Yang and his talented team, and the magnitude of the local marketplace opportunity. NGP played a leading role on the board during its formative development helping the company transition to a mobile Internet business.

A key highlight of NGP’s global thematic investing approach is the ability to leverage insights and learnings across regions. Based on insights from the Ganji investment in China, NGP led an early investment in Quikr, India’s leading local marketplace, in 2011. Quikr has harnessed mobile, innovative products and a strong marketing strategy to build a market-leading position in India, and serves tens of millions of customers each month. Quikr also benefited from an early view into the development of the local marketplace space in China facilitated by NGP . Earlier this month, Quikr announced an investment of $150M led by Tiger Global, and continues to expand rapidly across its various verticals such as real estate, automotive and used goods. While India and China are very different markets, NGP and its portfolio companies have found it useful to cross-leverage insights across these two regions.

As smartphones have become ubiquitous and consumers have become used to on-demand services, marketplaces are evolving from informational to transactional formats, from horizontal to verticalized experiences, and making deeper use of location and listing richer information. NGP has since Ganji and Quikr invested in several vertical local marketplaces, including Gigwalk (Local temp staffing), Hipmunk (Travel and Hotels), Meican (Food delivery) and YPlan (Local event ticketing).

With over 80% of global commerce still transacted offline, we believe we are in an early phase of a multi-decade trend of digital intermediation of offline commerce. NGP continues to actively make new investments in this area and is seeing the pace of innovation accelerate. New catalysts in this space come from richer use of data or analytics, wider deployment of sensors or wearables and more ubiquitous smartphone usage.

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