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Riyada Enterprise Development Acquires 50% Stake In The Entertainer
Riyada Enterprise Development (RED) has announced its intent to acquire a 50% stake in The Entertainer, a consumer services company that offers two-for-one discount vouchers for restaurants, hotels, spas, and entertainment in the Gulf region. While the amount remains undisclosed, founder Donna Benton noted that it's "a multimillion-dollar deal."
Founded in Dubai in 2001, The Entertainer was born out of Benton's realization of a lack of connection between outlets and consumers in a growing market. "When I first came to Dubai, I was driving, and was struck by the number of good restaurants there were a bit out of the way," shes says. "I thought, if people only had a little incentive to go to those restaurants, they would be a hit."
Today, The Entertainer publishes annual books for UAE, Bahrain, Oman, Qatar, Saudi Arabia, Kuwait and Cyprus, offering vouchers for restaurants, hotel stays, family and leisure activities, beauty and spa treatments. It also avoids some of the pitfalls that merchants using daily deals site face, by ensuring that its printed coupons have longevity. "The 2-for-1 concept remains the same and is valid any time. We don't charge the merchants any commission, and the vouchers are good for one year," says Benton.
In the first four years, The Entertainer launched 5 books, and has now grown 30-35% each year, by targeting residents as well as tourists looking for good local deals. The company currently works with over 3,000 merchants, including leading brands Jumeirah Group, Atlantis Hotel, IHG, Hyatt Group, Shangri-La, Fairmont, Hilton, Starwood and the Rotana Group.
Investment from RED, Abraaj Capital’s US$ 650 million high growth small and mid-cap (SMC) investment platform, will enable The Entertainer to scale. "It will catapult our growth, enabling us to expedite what we wanted to do in four years in two," says Benton. The company has already opened a second office in Singapore and plans to expand into Lebanon, South Africa, and Europe, increasing staff by 20-25%. By the end of 2013, The Entertainer plans to be in 13 countries with 22 books, and aims to print around 150,000 books.
Investment from RED will also facilitate The Entertainer's plan to launch an online booking engine and build complementary mobile applications.
The factors that made it an attractive investment for RED include not just its consistent growth but its first mover status in a nascent market, said Tom Speechley, CEO of Riyada Enterprise Development, in a statement. “The US discount voucher market, serving a population of just over 300 million, is estimated to be worth US$ 4.5 billion annually. By comparison, the MENA market, with a nearly identical population size, is currently in the very early stages of its development. This indicates to us the scale of the opportunity for the sector and particularly for The Entertainer, which is the region’s market leader.”
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