Dubai businessman Alabbar, Saudi PIF to set up $1 billion mideast e-commerce firm
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Dubai: A group of investors led by Emaar Properties PJSC chairman Mohamed Alabbar and Saudi Arabia’s sovereign wealth fund will each contribute $500 million to an e-commerce venture to tap the Middle East’s fast-growing online retail market. E-commerce firm Noon will go live in January and provide 20 million items for customers, Alabbar said at a news conference in Dubai on Sunday.
Saudi Arabia’s Public Investment Fund will provide half of Noon’s capital and will be an active participant in its board, while Alabbar and about 60 other Gulf-area investors will contribute the other half of its capital. The firm could be listed in five to seven years, he said.
Aramex PJSC, the Dubai-based courier and logistics company in which Alabbar bought the founder’s entire 9.9% stake in July, will back Noon’s operations. It will go live in January.
Economic prosperity and an expanding population in the Middle East is leading to increased investments in the consumer industry by companies and private equity firms. Amazon.com Inc. is weighing a bid for a stake in Dubai-based online retailer Souq.com FZ, people with knowledge of the matter said earlier this month. Careem FZ, a ride-sharing service that competes with Uber Technologies Inc. in the area, is seeking as much as $500 million in new funding, people with knowledge of the developments said in September.
The e-commerce venture is the latest that Alabbar has been associated with outside Emaar, the developer of the world’s highest skyscraper in Dubai. Alabbar said last month he planned to launch a social app similar to WhatsApp for the region. In June a UAE-based investor group he led agreed to buy a majority stake in Kuwait Food Co. (Americana), which operates KFC and Pizza Hut restaurants in the Middle East and North Africa.
Alabbar said he expects Noon to be profitable in five years and to enter Egypt and Iraq by 2018. It is also likely to use warehouses owned by Americana, which has three times the warehouse capacity of Aramex, he said. Bloomberg