MXit in talks to sell stake to local investors [Rumour]

Rumours are circulating around the industry that the popular instant messaging application and mobile social network, MXit, is about to be sold to new investors.

MXit is represented in a number of international markets including Malaysia, Kenya, India, Indonesia, United Kingdom, United States, Nigeria, Brazil, France, Germany, Italy, Portugal and Spain, where users have access to MXit’s chat function.

The service claims to have 37-million world-wide users operating in 120 countries, although these figures are unaudited and it’s unclear whether they represent active users or not.

A source close to Memeburn has confirmed the rumours, indicating that the buyer interested in MXit is the relatively-new Stellenbosch-based investment firm, World of Avatar. The company, founded by prominent businessman Alan Knott-Craig Junior, has been aggressively investing in a range of local startups, including free SMS service FSMS and online organiser Toodu. The company came to the rescue of mobile security start-up FiredID after its main investor Reinet Investments S.C.A. pulled out earlier this year.

Another Memeburn source noted that “MXit is a hot investment right now and I wouldn’t be surprised if some of the big names in the industry are on the lookout for ways to get their hands on some shares”.

“In this industry people are always ‘talking’, sometimes it means something other times it doesn’t. But big names always want to have coffee to discuss prospects,” the source added.

Paul Stemmet, former Head of Sales at MXit and now COO of World of Avatar, refused to comment on the rumours. A spokesperson for MXit responded to Memeburn: “I am sorry but we do not respond to market speculation.”

MXit was launched in 2005 by Herman Heunis and has seen impressive growth both locally and globally since its inception. MXit, part-owned by emerging markets internet Goliath Naspers, wants to reinvent itself as “a global leader in the mobile space”.

The exact details of the sale are unclear, but the transaction is unlikely to involve the Naspers shareholding which sits at about a 30 percent stake. Naspers is a notoriously bad seller of companies it has bought into.

MXit dominates the South African landscape, eclipsing Facebook and Twitter useage in that country. The service has also achieved footholds in Africa and emerging market territories like the Philippines.