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An insight into mergers and acquisitions in the Middle East marketplace

The M&A (mergers and acquisitions) deal activity was high in both the volume and the value in the first quarter of this year. An overall M&A (mergers and acquisitions) activity increased by 59% if compared to 48% of H1 2020.

The stats are recorded by the law firm Baker McKenzie where they revealed that the Middle East region sealed 307 deals in the first quarter of 2021.

An interesting trend that we noticed inside those stats is that the majority of deals signed in H1 of this year were cross-border deals. This shows businesses want to explore opportunities as the pandemic hit them badly in 2020. Total 199 deals were signed worthy of $30.7bn.

Osama Audi, M&A, private equity and venture capital partner, commented: “The sectors that have shown sustained growth with high levels of interest from regional and global investors include the technology and venture capital space.”

Digital innovation is selling like a hot cake in the Middle East mainly because there is a scope for it. When we look into stats and evaluate, we come to know that the investors are making big strides in digi-tech and there is no stopping any soon.

In this blog post, we will look into some of the noteworthy mergers and acquisitions in the MENA region so that we can safely say that the digitalization of businesses in any sector is growing by leaps and bounds.

Table of Contents

Mumzworld acquisition by Saudi’s Tamer Group

Tamer Group is one of the known Saudi companies selling in healthcare, FMCG, and beauty. They invested in Mumzwold back in 2018 and after witnessing its growth the group acquired it. Mumzworld which is region’s top online ecommerce company selling mother, baby and child products – 250,000 products roughly.

Customer base of Mumzworld is 2.5 million and lives in Saudi Arabia, UAE, Bahrain, Oman, Jordan and Lebanon. They have thousands of distributors, retailers, brands and partners working with them.

Mumzworld website gets a million vistors per month and the Android app gets half a million downloads per month.

Do you know its the largest female led ecommerce business in the Middle East? And they have recorded 10x growth in the last 5 years.

“E-commerce is no longer an option, but a necessity. The world has shifted to a customer-centric model with consumer behaviors, trends and data having become the new gold. Players in the space need to understand their customers, and adapt to their changing needs. Mumzworld will be a stepping stone towards “Tamer Digital” – a very ambitious vertical we intend to build to serve the nation, working towards delivering on Saudi’s Vision 2030.” Chairman Tamer Group Ayman Tamer.

Gellify and Azimut co-investment in Workfam

GELLIFY a B2B platform interested in investing high-tech startups has taken the Workfam startup under their wings.

GELLIFY along with Azimut (Azimut Digitech Fund) invested in Workfam startup, a Saas platform for employee engagement, supporting organizations for building healthy culture by keeping their resources engaged.

This investment will open doors for series of new co-investments in B2B tech startups through a dedicated Fund, soon to be announced.

Workfam was launched in 2018 by Cameron Collins and has grown fast enough in HR Tech – Employee Engagement market.

After the pandemic, modern remote workforce struggles in staying as engaged, motivated and productive like before, they need tools or platforms and this Workfam is exactly the same. Workfam works with organizations and help in wellbeing of their employees both mentally and physically. Internal competitions, badge collection, rankings, rewards for personal and professional milestones, driving cross-industry and cross-offering collaboration etc.

This investment will help them scale their international reach and consolidate their processes.

Stripe expanding in the Middle East

Stripe is a global online fintech payments company which is now paving way to the middle east marketplace. They have launched in UAE but they will also be in Dubai.

This isn’t something new, as they launched private beta in 2019 and now Stripe is officially in the region.

Do you know Stripe is the second large online payments player who have been launched in the region in the last 6 months?

However, it’s workable in UAE for now and will accept payments from customers all around the world. Stripe launch will not only benefit them but also the UAE businesses in multiple layers. Stripe existing clients can now reach a wide clientele in UAE whereas UAE can sell their products and services using this payment service easily.

Matt Henderson, EMEA Business Lead at Stripe, commenting on the launch, said, “The UAE is a thriving hub for technology, supported by strong investor appetite, internet-savvy consumers, and an open, innovative ecosystem of business leaders and entrepreneurs. Similarly, the pool of tech talent in the Middle East is growing very rapidly. However, companies still face challenges when trying to accept payments, make payouts, and manage the financial side of internet businesses. Stripe removes these complexities so businesses can focus on what makes them special.”

Spinneys in Dubai, Abu Dhabi and Sharjah

Spinneys is a supermarket based in UAE and has seen growth in profit which is why they are opening their branches in Sharjah, Dubai and Abu Dhabi.

The objective of new store openings is to bring opportunities closer to their customers. The company has 61 stores across UAE.

Spinneys felt the need of having strong online presence too which is the reason why they have online shopping platforms selling in Sharjah, Abu Dhabi, Fujairah, and Al Ain.

Spinneys introduced 14 new brands with 6 under development in Spinney’s Local Business Incubator. The CEO Sunil Kumar is of the view that this initiative will create 50 jobs locally and supports the UAE’s food security goals as well.

Yalla Market footsteps in Dubai

Yalla is a dark grocery store, selling grocery online – funded by Russian and UAE investors, planning to launch around 100 stores in the Emirates and Qatar by 2022.

They have launched their stores in August in Dubai marketplace, with the first launched at Jumeirah Lakes Towers (JLT).

Two superstores of Yalla will be opened in residential and business areas of Dubai by the end of 2021.

Yalla has a product range of 2100 and they are competing with Talabat Mart, InstaShop and Careem as they deliver groceries in 15 minutes using online and app based model.

Yalla delivery agents after receiving the online order use electric scooters and bicycles within 3 minutes of the order placement by the customer. This will facilitate short delivery time.

​​“Our team has been developing IT infrastructure for Dubai restaurants for several years, so we know the market from the inside.

We see that the level of development of e-grocery in the UAE is far from Russia, where express delivery services have achieved incredible success,” said Leonid Dovbenko.

Final verdict

We anticipate that in the months to come, there will be a sustained ecommerce business growth especially tech-focused regional and out-bound M&A as investors are hunting opportunities. The volume and the value M&A in the middle east marketplace is substantial compared to first 2 halves of last year.

All of the above mergers and acquisitions show that there is a massive growth in the middle east in the ecommerce and technology sectors. They are shifting towards online economy for getting more and more business value. Reach out, if you are interested in building an ecommerce or any platform of choice. Happy to help.

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