Sunday, Mar 10, 2013
DUBAI (Zawya Dow Jones)--Tiger Global Management, a New York investment firm known for its early stage investing in tech startups such as Facebook, Zynga and LinkedIn, has acquired Middle East daily deals website Cobone.com as international investors look to tap the region's growing e-commerce market, according to a person familiar with the matter.
The investment firm has bought out Jabbar Internet Group and senior management's stakes in the Dubai-based website, said the person familiar with the deal, who didn't want to be named because the deal hasn't yet been made public.
The person familiar with the transaction declined to disclose the exact size and details of the deal, but said it was between $20 million and $40 million, and was a combination of cash and equity stakes for the management, led by Irish entrepreneur Paul Kenny. Mr. Kenny, Pieter Sleeboom, head of strategy and sales, and Warwick Godfrey, head of marketing, will all stay on at the daily deals website.
"They (Tiger) are buying the management team and buying into the e-commerce market in the region," the person familiar with the matter said.
Cobone made $32 million in sales last year, but still posted an overall loss and is restructuring its operations to become profitable this year, the person close to the deal added, without providing further detail. Cobone.com declined to comment. Jabbar and Tiger couldn't be reached for comment. Tiger was a shareholder in Jabbar, but it isn't clear whether it has exited that investment.
Founded in 2010, Cobone quickly expanded to become one of biggest group buying websites in the Middle East and now claims to have 2 million subscribers to its daily emails and operations in the United Arab Emirates and Saudi Arabia.
Tiger's investment in Cobone comes as the daily deals model is being questioned around the world as Groupon Inc., the industry pioneer, struggles to become profitable, alongside peer LivingSocial Inc., which is also loss-making and received a much-needed $110 million boost from investors last month.
E-commerce is tipped to grow dramatically in the Arabian Gulf in the next few years as more consumers start buying more online. Estimates vary dramatically on the size of the current market and its potential, but a study from Interactive Media in Retail Group, based in London, forecasts total e-commerce spend in the Gulf to increase from $3.3 billion in 2010 to $15 billion by 2015.
Souq.com, an online retailer akin to Amazon Inc., Namshi.com, a fashion retailer, and MarkaVIP.com, a website that provides discounts on luxury and designer goods, have all received funding from international investors, such as J.P. Morgan, Blakeney Management South African media firm Naspers, in the past year.
Write to Rory Jones at rory.jones@dowjones.com
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(END) Dow Jones Newswires
10-03-13 0520GMT
