By Neil Halligan
Fundraising places value of Dubai-based e-commerce site at $1bn - report
Dubai-based e-ecommerce site Souq.com is seeking $300 million to fund its expansion plans, it has been reported.
Bloomberg reported that the fundraising for online retailer, which is backed by a number of investors including New York-based Tiger Global Management LLC and South Africa’s Naspers Ltd, values the website at $1 billion.
Souq.com, which was established in 2005, is the Middle East’s largest Internet-based business. With over 23 million visitors to its website each month, it has more than 400,000 products across categories such as consumer electronics, fashion, household goods, watches or perfumes.
Often tagged as the ‘Amazon of the Middle East’, Souq.com raised $75 million from Naspers in March last year, raising the amount raised since it started to $150 million.
A PayPal report estimated that the e-commerce market in the Middle East will be worth $15 billion this year, with roughly 10 percent of purchases made on mobile devices.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Does this mean that they have Amazon like net profit margins as well? If its the case, this will be a great deal for early investors and a rubbish one for late entries.
I could see an outfit which offers a better services easily overtake souq.com, their service is horrible and their website is slow, clunky and ugly. The search function is horrible and gives out the worst suggestions. Their product range is dated and much of it is overstock dumped on the website by brand agents.
Im guessing most of the money they get goes towards physical expansion as they try to increase and take market share, while investing very little in the user experience and service.
Great for the founders and early investors. The founders will be known as entrepreneurs and innovators (for copying a business model) and will rub each others backs while speaking at Middle East business conferences and talk panels. Kudos to the founders for getting in early, theyll make a lot of money.
Gosh what's with the seething commentary JohnA?
1. There's *nothing* wrong with "copying" an idea. It's execution that matters, period. It's a shallow insult thrown at people that had the balls to see an opportunity and implement it before BigCompany came by; kudos to them for trying.
2. They own everything. The website, the courier, the payment processing, the data .. everything. It's mind boggling how they've been able to create a walled garden so high that it would be very, very difficult for someone to come in and take any significant market share from them. You can't beat Souq at Souq's game -- any newcomer would have to play an entirely different game to get a fighting change at making it ahead.
3. You're right -- Souq is nowhere near where they need to be in terms of customer support, delivery times, inventory management, but they're our best bet ... until someone else comes along and does something about it.