After months of speculation that its backer Jabbar Internet Group were shopping around for a sale, the leading Middle Eastern daily deals site Cobone has been acquired by investment firm Tiger Global Management. The size of the deal remains undisclosed, though my understanding is that the figure of $40 million that’s been touted building up to this sale isn’t far off the mark.
Furthermore, the acquisition — which sees Jabber Internet Group exit entirely — is said to leave Dubai-based Cobone with additional capital to further its ambitions in the region, while its Irish founder and CEO Paul Kenny, along with other key members of the management team, will remain with the company.
Launched in July 2010, Cobone operates a group buying model akin to Groupon, by offering subscribers to its site a daily deal on the best things to do, see, eat and buy in cities across the Middle East.
While this acquisition likely represents one of, if not, the largest e-commerce exit in the region, where e-commerce remains far behind many other parts of the world, the company’s funding and finances remain opaque.
It’s not clear, for example, how much Jabbar Internet Group or Cobone’s other backers — Klaus Hommels and Oliver Jung — have invested in Cobone, so it’s difficult to gage how successful an exit this is. The company doesn’t disclose revenue, either, or if it’s profitable (last year one reportpegged its revenues in 2012 at around $31m).
The company is willing to wax lyrical about user numbers, however. It says that it has a subscriber base of 2 million to its daily deals newsletter, and has sold 1.5 million coupons, “saving” its customers $100 million.
What’s also clear is that Cobone has successfully fended off one global competitor in the form of LivingSocial. The U.S. company made strides to enter the Middle East by acquiring local player GoNabit in June 2011, only to shut down operations just over a year later.
Samih Toukan, Chairman of Jabbar Internet Group, comments in a statement: “This deal represents the international recognition of a highly successful local business. With Paul Kenny, we created a company that lead the way in regional group buying, and took on global players on our own turf. While this deal represents a successful exit for the Jabbar Group, we have little doubt in Cobone’s commitment to the region and in Paul’s determination to continue excelling and leading his brainchild to new successes.”
Finally, an interesting tidbit to the Cobone story. So nascent was e-commerce in the Middle East when the startup first set up shop almost three years ago, 80% of its business involved cash on delivery. Users would order their daily deal online and get the voucher delivered to their door where they’d be asked to pay.