Prosus, the subsidiary of Naspers that focuses on classifieds, has announced plans to sell OLX Autos, its car classifieds business.
The move will enable the company to concentrate on its other core classifieds business, OLX Group, which operates in over 30 countries, reaching 322 million people per month in categories such as autos, property, and jobs.
OLX Autos began in 2018 with a minority investment by OLX Group in Frontier Car Group (FCG), with a further $500m investment into FCG in 2019 making OLX Group the majority shareholder.
In January 2020, OLX and FCG combined operations in selected markets, rebranding from local brands to "OLX Autos" in most countries. By 2021, OLX Autos had surpassed $1bn in total car transactions since its inception in January 2020, via its online platforms and inspection centers in 10 countries.
Prosus cited ongoing macroeconomic and market challenges, such as the high cost of capital and high inflation, which have led to a significant and persistent slowdown in the second-hand car market, as the reason for the sale.
Despite OLX Autos having leading positions across many of its key markets, a global growth strategy is no longer the right approach for shareholders. The sale of OLX Autos will lead to a significant improvement in the profitability profile of the Classifieds segment as a whole.