Hans Hawinkels is the man behind identifying Tencent as a great investment and facilitating a deal for Naspers to buy a 46.5% stake for $33 million – one of the best venture capital deals of all time.
Shortly after becoming Naspers CEO, Koos Bekker appointed Hawinkels as MIH Asia CEO and asked him to move to Hong Kong to look for new opportunities in the Far East.
He identified Tencent – which operated the rapidly growing instant messaging platform QQ – and met with its founder, Ma Huateng (Pony Ma).
Huateng was ready to partner with Naspers, but the MIH and Naspers executive management had reservations about investing in Tencent.
They had already pumped a lot of money into Chinese Internet ventures, which did not show a significant return.
In his book Koos Bekker’s Billions, TJ Strydom said Naspers was about to report the first annual loss in its history, and the dotcom crash was unfolding.
However, Hawinkels was adamant that it was a good opportunity and pushed to make the Tencent deal happen.
He also worked for months to convince two major Tencent shareholders, IDG and PCCW, to sell their shares.
With everything in place, Bekker helped convince Naspers to invest $33 million – around R266 million at the time – for a 46.5% stake in Tencent.
The timing was exceptional. The deal was done in June 2001, and by the end of the month, Tencent broke even for the first time.
This high-risk investment changed Naspers’ future. Tencent became one of the largest companies in the world and pushed Naspers and Prosus’ combined market cap into the trillions.
One would have expected Hawinkels to be elevated to hero status in the Naspers corridors, but his fate was far less illustrious.
Bekker and the Tencent founders have all become billionaires several times over and are now household names in the venture capital and technology space.
Unfortunately for Hawinkels, it took a few years for Tencent to show its true potential and emerge as a global tech giant.
Naspers’ losses in China started to mount, and many of its investments in Europe, the United States, and South Africa were bleeding cash.
The company announced rapid and drastic cost-cutting. It also cut back its support for operations that took too long to break even.
Hawinkel became a victim of what former Naspers CEO and chairman Ton Vosloo described as “Koos’ guillotine”.
Hawinkel’s contract was not renewed after 2002, and he missed out on the long-term benefits of his excellent Tencent investment.
Since his departure from Naspers, Hawinkel continued his business career with directorships at Truworths International, Times Media Group, and Wyzetalk.
This article is based on edited extracts from TJ Strydom’s book, Koos Bekker’s Billions.