Dubai-based online retailer Souq.com, backed by investors including Tiger Global Management LLC, is seeking $300 million for expansion, according to three people with knowledge of the matter according to Gulf News.
The fund-raising would value the business at about $1 billion, the people said, asking not to be identified as the information is private. New York-based Tiger Global and South Africa’s Naspers Ltd., another existing investor in the company, are leading the fund-raising, two of the people said.
Private market valuations of internet companies including Spotify Ltd., Snapchat Inc., and Uber Technologies Inc. have been rapidly growing, following the rise of publicly traded social media companies such as Facebook Inc. Uber’s valuation has more than doubled in six months to $40 billion.
Souq.com raised $75 million from Cape Town-based Naspers in March last year, in a deal it said at the time was the largest amount raised for an internet-based business in the region. That deal brought the total amount raised by Souq.com since its inception to $150 million.
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The Dubai company, which operates a similar business model to Amazon, was established in 2005. More than 10 million visitors view its catalogue of products including electronics, watches, household goods and toys each month, according to its website.
The online commerce market in the Middle East will be worth $15 billion this year, with about 10 per cent of transactions on mobile devices, according to a PayPal Inc. report.
A spokesman for Souq.com declined to comment. Carolyn Sargent, a spokeswoman for Tiger Global at Rubenstein Associates in New York, declined to comment, while Naspers didn’t respond to requests to comment.
Souq.com is the largest E-commerce platform in the Arab world, featuring more than 400,000 products across categories such as consumer electronics, fashion, household goods, watches or perfumes. Today Souq.com attracts over 24 million unique visits per month and is fast growing as more consumers shop online in the Arab world.
Souq.com operates both as a retail site and as a marketplace for third party sellers. It offers a convenient and safe online shopping experience with online payments, option to pay cash on delivery and free returns.
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 late 2011.
Headquartered in Dubai, UAE, Souq.com caters to the needs of local markets with commercial offices in Egypt, Kingdom of Saudi Arabia and Kuwait, and a technical and development centers in Jordan and India.
Souq.com employs 1,000 people directly. Indirectly, through its networks of partners, suppliers and couriers, it has provided for another 6,000 people not to mention 75,000+ sellers, many of whom have built their livelihood via the website.