Global food and grocery delivery giant Delivery Hero has acquired Dubai-based on-demand grocery delivery marketplace InstaShop for $360 million, it announced in a statement today. It is Delivery Hero’s one of the largest acquisitions in the Middle East & North Africa and the first in grocery delivery (in the region). All the previous acquisitions here have been in the food delivery space.
The initial purchase price, according to the statement by Delivery Hero, amounts to $270 million. The rest of $90 million is linked with the founding team meeting growth and profitability goals in the next few years.
InstaShop, founded in 2015 by John Tsioris and Ioanna Angelidaki, has a presence in the United Arab Emirates, Qatar Egypt, Bahrain, and Lebanon, offering on-demand grocery delivery in these markets using a marketplace model – where it connects customers with grocery stores to facilitate the purchase and the stores take care of the logistics. It has over 1,500 vendors on its platform and offers both on-demand and scheduled delivery.
The Dubai-based startup per statement generates about $300 million GMV (based on Q2 2020 annualized basis), up 330 percent year-on-year basis and has a positive EBITDA margin.
It is not clear how much InstaShop had raised in total funding. They had raised $750,000 in seed funding from VentureFriends in 2016. In the same year, Souq had announced that it has made an investment in InstaShop. It is not clear but it seems Souq had divested its stake in it before the company was acquired by Amazon. Jabbar Internet Group is also apparently an investor in InstaShop.
Delivery Hero, following its traditional strategy, will allow Instashop to operate as an independent brand under its current leadership. It said that the Dubai startup is a complementary fit next to its current quick commerce strategy in the region.
“InstaShop’s business model has proven to be rapidly scalable and economically successful. While InstaShop’s immediate focus lies on driving growth within its current geographies, joining Delivery Hero also opens up future complementary opportunities of expanding its footprint globally,” noted the statement.
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