After almost a year of speculation, MENA’s biggest ecommerce company Souq.com has confirmed that it’s raised a $275 million round and likely throwing it into the rarified realm of 'unicorn status'.
A Bloomberg article in April last year revealed Souq.com was seeking $300 million and this which would put it into the unicorn class of tech companies - those valued over $1 billion. In November last year it disclosed a $27 million round from the IFC, but has not claimed the 'unicorn' tag in this latest announcement.
According to Wamda data, this is the largest disclosed fundraising round secured by a tech startup in the Middle East.
The round included South African investor Naspers and New York-based Tiger Global Management.
Souq.com’s other investors include Standard Chartered Private Equity, the World Bank’s IFC, and Baillie Gifford.
“The funding will be used to drive further growth by investing in technology, scaling our marketplace operations, launching new product categories and recruiting the best talent,” cofounder and CEO Ronaldo Mouchawar said in a statement.
“SMEs in particular are true growth drivers in our economy and our aim is to empower merchants to reap the benefits of e-commerce and further drive growth via mobile.”
He said growth was inherent from being in a market with the highest mobile penetration in the world, and Souq.com would capitalize on the “step-change in consumer behavior and business benefit towards mobile commerce”.
The MENA ecommerce market is expected to reach $20 billion this year.
Souq was founded in 2005 as an Ebay-like auction site and was part of the Maqtoob family. It was left out of the sale of the parent company to Yahoo in 2009, but it really began to take off as a solo enterprise after a shift to fixed price sales and a $40 million cash injection by Naspers in 2012.
In 2013 it launched a mobile strategy, which was built around sales of cheap Souq.com-supplied tablets and mobiles.
The ‘White Friday’ sale was launched in 2014 to try to bring the Black Friday Thanksgiving sales concept to the Middle East. It was widely popular, Mouchawar told Wamda in an interview, and required a major rethink about how they managed site traffic and staffing over a short, but massively popular period.