Prosus: Leveraging AI and Ecosystems to Unlock $200B Value by 2028

Prosus, the global internet conglomerate, is positioning itself as a leader in the AI-driven e-commerce revolution. With its FY28 financial targets and strategic bets on AI, the company aims to transform into the largest European internet firm, targeting $200 billion in value within three years. This article explores how Prosus's ecosystem scalability, AI integration, and synergies from its Just Eat Takeaway acquisition could unlock long-term value for investors.

The Financial Blueprint: Doubling Revenue and Tripling EBITDA

Prosus has set an ambitious revenue target of €12.5 billion by 2028, doubling its 2025 base of €6.2 billion. This growth hinges on operational efficiency, regional expansion, and AI-driven innovations like its Large Commerce Models (LCMs) and Toqan AI assistant. Meanwhile, adjusted EBITDA is projected to nearly double to €1.1–€1.2 billion by 2026, with further margin expansion expected as AI optimizes costs and enhances customer retention.

AI as the Engine of Growth: LCMs and Toqan

Prosus's AI strategy centers on its proprietary Large Commerce Models (LCMs), which analyze user interactions across its platforms to predict behaviors and optimize services. These models, currently at GPT-2-like capabilities, aim to reach GPT-4-level sophistication by 2028. Early trials with iFood (Brazil's leading food delivery app) and OLX (classified ads) have demonstrated scalability, with plans to expand into Europe and India.

The Toqan AI assistant further streamlines operations by automating tasks such as customer service and logistics. For instance, Meesho's Hindi/English voice bots and Swiggy's personalized recommendations exemplify how AI is boosting user engagement and reducing costs. With over 800 AI models in production and $100 million annually invested in AI R&D, Prosus is building a competitive moat in AI-driven e-commerce.

Regional Playbook: Exploiting Underpenetrated Markets

Prosus's growth is geographically diversified, with distinct strategies for Latin America, Europe, and India:
- Latin America: The iFood ecosystem, bolstered by the $4.1B acquisition of travel platform Despegar, aims to double revenues to $2.8B by 2028 while tripling adjusted EBITDA.
- Europe: The integration of Just Eat Takeaway with OLX and eMAG will leverage iFood's AI logistics to reduce losses. Prosus targets 2.5x revenue growth in Europe to $8.75B by 2028.
- India: A $6.5B bet on 30+ companies (e.g., Swiggy, Rapido) aims for a 5x portfolio value increase through AI synergies, such as multilingual voice bots and demand forecasting.

Synergies from Just Eat Takeaway: A Catalyst for Efficiency

The $14B acquisition of Just Eat Takeaway is a critical synergy play. By applying iFood's AI-driven logistics to European markets, Prosus can reduce delivery costs and improve margins. The deal also strengthens its food delivery ecosystem, a high-frequency service with strong customer stickiness.

Dividends: A Stable Cash Flow from Tencent

Prosus holds a 29% stake in Tencent, generating significant dividends. In 2024, Tencent distributed ~$6.5B in dividends, ~30% of Prosus's revenue. While Tencent's valuation faces headwinds, Prosus's disciplined capital allocation—reinvesting 50% of free cash flow into growth and returning 50% to shareholders—ensures a stable dividend stream.

Risks and Mitigants

• Geopolitical Risks: Regulatory scrutiny of Tencent's U.S. listings and data privacy laws could impact cash flows. Prosus mitigates this by focusing on AI-driven organic growth.
• Execution Risk: Integrating acquisitions like Just Eat requires seamless AI integration. Prosus's track record in scaling iFood and OLX provides confidence.

Conclusion: A Buy Rating with Long-Term Conviction

Prosus's transition to an AI-first tech operator, paired with underpenetrated markets and dividend stability, positions it for sustained growth. Its FY28 targets are aggressive but achievable given its ecosystem scale, AI investments, and cross-regional synergies.

Investment Thesis: Buy Prosus for its AI-driven moat, geographic diversification, and dividend stability. The stock's current valuation (P/E ~18x FY28E) offers a compelling entry point for investors seeking exposure to the next wave of e-commerce innovation.

Risk Rating: Moderate (B+). Favorable for long-term holders with a 3–5 year horizon.