E-commerce giant Delivery Hero snaps up InstaShop, a Dubai-based grocery delivery service, for a whopping $360 million.
Delivery Hero, a global food and grocery delivery giant, has made its first foray into the grocery delivery sector in the Middle East & North Africa (MENA) with the acquisition of InstaShop, a Dubai-based on-demand grocery delivery marketplace, for $360 million.
Founded in 2015 by John Tsioris and Ioanna Angelidaki, InstaShop operates in the United Arab Emirates, Qatar, Egypt, Bahrain, and Lebanon, offering on-demand and scheduled grocery delivery using a marketplace model. The company has over 1,500 vendors on its platform and has proven to be rapidly scalable and economically successful.
In a statement, Niklas Östberg, CEO and Co-Founder of Delivery Hero, expressed delight about the acquisition of InstaShop and its added expertise to Delivery Hero's quick commerce expansion. John Tsioris, CEO and Co-Founder of InstaShop, shared similar sentiments, expressing enthusiasm about the partnership with Delivery Hero.
Delivery Hero values InstaShop's team and their capabilities, as they embody Delivery Hero's values. The acquisition is one of Delivery Hero's largest in the MENA region and the first in the grocery delivery sector in the region.
Before its acquisition by Delivery Hero, InstaShop had received investments from Gulf Capital, Raed Ventures, BECO Capital, Jabbar Internet Group, and VentureFriends. Notably, Souq had divested its stake in InstaShop before the company was acquired by Amazon.
The initial purchase price for InstaShop is $270 million, with the remaining $90 million linked to the founding team meeting growth and profitability goals in the next few years. According to a statement, InstaShop generates about $300 million GMV (based on Q2 2020 annualized basis), up 330 percent year-on-year basis, and has a positive EBITDA margin.
The partnership between InstaShop and Delivery Hero offers opportunities for InstaShop to continue growing its business and expand globally. Delivery Hero sees InstaShop as a leading player in the grocery segment with a service customers love. InstaShop will continue to operate as an independent brand under its current leadership after the acquisition.
This article was written by Zubair Naeem Paracha, Founder at our xA tech and startup enthusiast based in Lahore, Pakistan.
Niklas Östberg also mentioned that Delivery Hero's expertise will be beneficial for InstaShop's growth. He believes that this acquisition is a significant step in Delivery Hero's mission to become the global champion of online food delivery.
In conclusion, the acquisition of InstaShop by Delivery Hero marks an exciting new chapter for both companies. With InstaShop's strong presence in the MENA region and Delivery Hero's global reach, the partnership is poised to revolutionize the grocery delivery sector in the region.
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