Dubai’s Cobone.com bought by US investment firm

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Dubai-based daily deals website Cobone.com has been acquired by US investment firm Tiger Global Management for an undisclosed amount.

The deal for Cobone.com, which was founded in April 2010 and competes with Groupon in the Middle East, will see parent company Jabbar Internet Group exit its investment in the online firm.

Cobone.com’s Irish founder Paul Kenny and other senior executives will remain following the deal, which a statement said would provide it with additional capital to fund long-term commitments in the Middle East.

“Tiger Global gives us the international clout and the financial resources to expand regionally and surpass already high customer expectations,” Kenny said.

“Loyal Cobone users can look forward to many exciting developments and innovative offerings in the very near future.”

Cobone.com does not disclose its revenues or whether it is profitable, but says it has a user base or more than 2m and has sold more 1.5m online discounts. Financial details of the Tiger transaction were not disclosed, but US internet start-up news site TechCrunch estimated the sale to be worth nearly US$40m.

"This deal represents the international recognition of a highly successful local business. With Paul Kenny, we created a company that lead the way in regional group buying, and took on global players on our own turf,” added Jabbar Internet Group chairman Samih Toukan.

“While this deal represents a successful exit for the Jabbar Group, we have little doubt in Cobone’s commitment to the region and in Paul’s determination to continue excelling and leading his brainchild to new successes.”

The value of e-commerce-related transactions is about US$11bn a year in the Middle East, according to Jawad Abbassi, founder and general manager of technology consultancy Arab Advisors Group.

Among the Gulf states, the UAE leads the way in e-commerce spending with sales reaching about US$2bn in 2010, according to a study by Visa and Interactive Media in Retail Group International.

The UAE's online spending equated to 55 percent to 60 percent of total GCC e-commerce sales. Saudi Arabia was the second largest market, with an estimated US$520m, followed by Qatar (US$375m), Kuwait (US$280m), Bahrain (US$175m) and Oman (US$70m), according to the study.

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Posted by: Telcoguy

@Jess, "job assurance" is a dream in any company/sector

@Hisham this is not so much about "lean startup" but 'hype", plenty of it. That and poor execution

Groupon was probably the worst offender in terms of sustainability (or lack of), funny how much heat you could get for pointing this not so long ago

Plenty of startups in the coupon/e-retail space and a few more will come (I know people involved, we may even get involved ourselves) but so far nobody is coming with both a good, sustainable, business model, and proper execution. Margins are tight, value is hard to prove, and putting all the pieces together is much harder than people think, specially if you need to get payment on board

Posted by: Jess

@Telcoguy: Yes, now we are on the same page.
I too get my stuff online (in GCC btw).
If they are not available, the unit is sourced out and delivered to me which i feel is great and convenient.

Posted by: Telcoguy

@Jess, you mean online sales companies like Amazon f? They have put a few brick and mortar bookstores out of play methinks. Oh and my electronics is all bought online btw (but not from GCC companies)

There is no "job assurance" in any sector, not even in the GCC. People have lost jobs here (banking anyone), people get replaced by cheaper alternatives, in some sectors slower than in other regions, in others equally fast even if industry is doing well

But I think what you are talking is different. You are talking about survival of new ventures, well yes. New companies have a high child-death rate, not just online retailers. It simply happens that when an online venture shuts down it is more visible that the new pet store down in the building closing.

Half of the companies die in their first 4 years:
http://www.statisticbrain.com/startup-failure-by-industry/

Posted by: Jess

@Telcoguy - the breaking news simply doesn't apply to the middle east for the next 10 years. any changes takes time and really costly. Do you know that they had introduced PickupZone some years back at a huge expense and was literally closed down which would have replaced people by now.
I do agree that jobs can still be lost, but we are talking about online shopping companies and the claim that you make is in general.
Can you name at least a handful of online shopping companies who had survived for more than 3 or 5 years. Not to forget to mention tat the same time he number of them closed down also, so we know the ratio of existence/emerging and closed down.

Posted by: Telcoguy

@Jess, I have some braking news for you. Jobs get shifted to places with lower costs, people get replaced by machines

Industry is "stable" even booming, companies may be increasingly profitable, jobs can still be lost either net losses, or in specific locations

I wonder where you have been living/working to not be aware of this

Posted by: Jess

@Telcoguy: if the industry is not stable, then it is a dream. Else wise, they are stable

Posted by: Ali

Cobone's customer service is dismal. They didn't do due diligence on their partners when they first set up, and even now I hear from friends who have had horror experiences. Why would anyone buy from a daily deals site like Cobone or GroupOn? Isn't it time traditional retailers did e-commerce properly and thought about giving consumers real customer service?

Posted by: Ahmad

Didn't Tiger already own part of Cobone? Tiger was a major investor in Samih Tukan's Maktoob.com which was sold off to Yahoo! (and resulted in the creation of the Jabbar Group). Tiger also partnered with the Jabbar Group in Joob - their canned travel portal. With Groupon and other coupon sites tanking in the US what is the merit in purchasing Cobone? Or, is this just a PR stint to kick some life into Cobone?

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