Dubai-based shopping and delivery platform InstaShop has been acquired by Delivery Hero, a German delivery firm, for $360 million as part of its expansion plans.
InstaShop, which generated $300 million gross merchandise value (GMV) annually as of Q2 2020, up 330 percent year-on-year, was acquired by the food delivery giant on a cash-free and debt-free basis.
InstaShop CEO John Tsioris, who founded the quick-commerce app in 2015 with Ionna Angelidaki, said: “The partnership with Delivery Hero is a great opportunity for us to continue to grow our business and put the group’s expertise to use.”
Delivery Hero has consolidated its businesses in the Middle East and North Africa under the brand of Talabat.
Riding on online shopping demand
The UAE and wider MENA region have previously been considered slow to embrace online shopping, but demand has surged since the Covid-19 global pandemic and implementation of movement restrictions in March.
While prior to the pandemic, one quarter of consumers in the MENA region said they exclusively shopped for groceries online, the figure is now more than half according to data from PwC.
InstaShop initially allowed customers to order from groceries or supermarkets and receive goods in around 45 minutes, or during a specified time slot. It has expanded to include a range of stores, from pharmacies, pet shops, cosmetics and beauty retailers to flower shops and bottled water delivery. It is also a platform for home cleaning provider Maids Service.
The app connects stores or vendors with customers and provides the payment platform, while the vendors themselves are responsible for delivery.
Around 1,500 outlets are now listed on the app, which operates in the UAE, Qatar, Bahrain, Egypt and Lebanon.
Niklas Östberg, CEO and Co-Founder of Delivery Hero, founded in Berlin in 2011, said: “The InstaShop team embodies our values and brings a strong vision and capabilities. As a leading player in the grocery segment, InstaShop has built service customers love, and their expertise is a great addition to our quick commerce expansion.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
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© ZAWYA 2020