Souq.com raises Dh1b to expand operations
Ronaldo Mouchawar (Co-founder and CEO of Souq.com)
Dubai - "The funding round took around three-four months and we finalised it last week. We have international investors, regional investors and local investors as well," co-founder and chief executive officer of Souq.com Ronaldo Mouchawar told Khaleej Times.
Souq.com has secured Dh1 billion ($275 million) in fresh funding through a dozen investors including World Bank, Standard Chartered Private Equity (SCPE), Tiger Global Management and Naspers among others.
"The funding round took around three-four months and we finalised it last week. We have international investors, regional investors and local investors as well," co-founder and chief executive officer of Souq.com Ronaldo Mouchawar told Khaleej Times.
Souq.com has enough funding for its mid-term plans and initial public offering (IPO) is not being considered at the moment, according to Mouchawar.
"The readiness of the company in terms of practice, we are closer to being ready for such an IPO," he explained.
Taimoor Labib, regional head of Mena Private Equity and head of Global Private Equity Portfolio Management at SCPE, commented: "We are excited to be participating in this unique regional retail opportunity with a top notch management team and shareholder group. The disruptive nature which online businesses pose to traditional brick and mortar enterprises continues to evolve and Souq.com is well positioned as the clear regional market leader."
Successful completion of this latest round of funding makes Souq.com the highest valued internet company in the Middle East. It was also the largest financing of an e-commerce business in the region. Allen & Company served as financial advisor to Souq.com on this latest round of financing.
Talking about its future plans after securing a huge amount from investors, he replied: "We are focused on multiple markets. We will continue to grow markets by improving the tools of our platform and technology we use. In addition, we are also investing into logistics to improve delivery service."
He mentioned that human capital is also important for the company. "We brought a lot of talented people to the team and also retaining talented staff," he added.
Souq.com is the largest online retail and marketplace platform in the Arab world, featuring more than one million products across 31 categories such as consumer electronics, fashion, health and beauty, household goods and baby.
In addition to improve service and customers' experience, the online retailer is planning to launch new product categories. "We are looking to fashion, lifestyle, home appliances categories and fast moving goods."
Often tagged as the "Amazon of the Middle East", the ecommerce site operates both as a retail site and as a marketplace for third party sellers. Today, Souq.com attracts over 45 million visits per month, with localised operations in the KSA, the UAE and Egypt.
Mouchawar declined to share its annual turnover but said the company is growing fast. "We have witnessed a 10-fold growth in revenues during the last three years," he informed. Market sources told this scribe that the ecommerce site touched Dh500 million turnover mark in 2014 and Dh1 billion in 2015. The e-commerce market in the Middle East is growing very fast and is expected to reach $20 billion this year.
He said: "Further growth is inherent from being in a market with the highest mobile penetration in the world and continued adoption of mobile commerce by our customers. Souq.com is constantly enhancing its customer experience, for both buyers and sellers."