By Daniel Shane
Daily deals website acquired by Tiger Global Management for undisclosed amount
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.
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?
Now the question arises:
1. Online Shopping Companies Pop Up/Close Down or are being bought. Is it for good or a mere cover up?
2. How many actually are doing well?
3. The Job assurance of people working in such companies are really pathetic. Anytime one can lose their jobs.
5. How many companies until now have crossed at least a milestone of 4 or 5 years establishing one? Is there to name one?
I think it is a mere PR stink like what Ahmad commented.
As has been made clear to everyone by Andrew Mason's dismissal, this type of business is based on a hype and the hype is kind of over. This proves that tech startups tend to follow Lean Startup too blindly, only work towards an MVP, but forget that a business also has to be sustainable. I would say to the founders: take the money and run!
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?
@Telcoguy: if the industry is not stable, then it is a dream. Else wise, they are stable
@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.
@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.