Middle East-based horizontal e-com venture Souq.com has completed a funding round worth more than $275 million in what is termed as the largest financing of an e-commerce business in the Middle East region.
Investors in this round include New York-based Tiger Global Management and South Africa’s Naspers Ltd, both of which had invested in Souq.com in earlier funding rounds.
Standard Chartered Private Equity, International Finance Corp (an arm of the World Bank Group), Baillie Gifford and many regional and tech-focused financial institutions were also part of the new funding round.
The investment will support the company’s growth, strengthen e-commerce in the region and empower more businesses to grow online through Souq.com’s platform, the company said in a statement.
“The funding will be used to drive growth by investing in technology, scaling our marketplace operations, launching more product categories and recruiting talent,” Ronaldo Mouchawar, CEO and co-founder of Souq.com, said.
“The e-commerce market in the Middle East is growing fast and is expected to reach $20 billion this year. We connect people to products through our retail and marketplace model,” he said.
According to the company, the latest round also makes Souq.com the most valued internet firm in the Middle East. Bloomberg reported that Souq.com’s post-money valuation is $1 billion.
In a recent report published by Dubai-based integrated communications agency IHC, Souq.com ranked number five for brand awareness in the UAE.
Established in 2005, Souq.com pioneered online shopping in the region as an auction site linked to the Arab internet portal Maktoob. When Yahoo! acquired Maktoob in August 2009, Souq.com was not included in the sale and was spun off as part of Jabbar Internet Group. The site then switched to a marketplace with a fixed price model in early 2011, and then launched its retail division in late 2011. Souq.com features more than 400,000 products across categories and claims to attract over 24 million unique visits per month.
Other major ecommerce players in the Middle East region include Rocket Internet’s Wadi.com. Last month, Wadi.com, operated by Dubai-based Wadi International General Trading LLP, raised $67 million (around Rs 458.4 crore) in Series A round of funding led by Al Tayyar Travel Group, with existing investor Middle East Internet Group (MEIG) also co-investing. The firm’s founding team includes Pratik Gupta, who was part of Jabong’s founding team; Ankit Wadha, an ex-McKinsey consultant who served clients in the Middle East and Kanwal Sarfraz, also a former McKinsey consultant with stints at Unilever and Gallup in Pakistan.
Besides backing Souq.com, Tiger Global and Naspers are also investors in India’s largest e-commerce platform Flipkart.com. In fact, Tiger Global is Flipkart’s largest investor. In July 2014, it raised $1 billion (around Rs 6,000 crore) in a funding round co-led by Tiger Global and Naspers.
Allen & Company LLC served as financial advisor to Souq.com on this round of financing.