German food delivery company Delivery Hero acquired the Dubai-based online grocery platform Instashop as it looks to further expand within the Mena region.
Delivery Hero said on Thursday that it acquired all outstanding shares of Instashop at a valuation of $360 million (Dh1.3 billion). It will pay an initial price of $270m and will pay the remaining amount if Instashop meets its profitability targets.
Instashop will use the funding to launch in new markets and grow its operations, Delivery Hero said.
"As a leading player in the grocery segment, InstaShop has built a service customers love, and their expertise is a great addition to our quick commerce expansion," said Niklas Östberg, chief executive and co-founder of Delivery Hero.
As per the deal, Instashop will operate as an independent brand under its founders but will complement Delivery Hero's operations in the region.
Launched in 2015 by John Tsioris and Ioanna Angelidaki, Instashop operates in the UAE, Qatar, Egypt, Lebanon and Bahrain and partners with 1,500 vendors. The online grocery platform has an annualised gross merchandise volume of $300m, according to Delivery Hero.
"The partnership with Delivery Hero is a great opportunity for us to continue to grow our business and put the group's expertise to use," Mr Tsioris said.
Although Instashop is "focused on driving growth within its current geographies, joining Delivery Hero also opens up future complementary opportunities of expanding its footprint globally", the company said.
Delivery Hero owns and operates Middle East-based food ordering platform Talabat, which has gradually acquired its regional rivals to consolidate its operations and shore up its bottom line in a highly fragmented market.
Last year, it bought the Middle East operations of its major competitor Zomato but has allowed it to retain its brand identity. However, it absorbed some of its earlier acquisitions such as Kuwait's food delivery platform Carriage and Egypt's Otlob under Talabat.
Instashop's acquisition could help Delivery Hero cement Talabat's grocery delivery operations in the region and advance its strategy of quick commerce, the company said.
The partnership with Delivery Hero is a great opportunity for us to continue to grow our business ...
The grocery retail market across the Mena region is forecast to grow at 9.5 per cent this year, according to data from Euromonitor, to a value of $426.5bn. However, the online grocery market is still largely untapped. According to a report by Wamda, the e-grocery market in the GCC and Egypt is currently worth $200m and accounts for less than 1 per cent of the region's burgeoning e-commerce industry.
However, the coronavirus pandemic has shifted consumption trends as stay-at-home measures forced people to rely on digital platforms like Instashop and other e-commerce giants such as Noon and Amazon.
This has also increased the investment appeal of such companies. Earlier this year, Saudi Arabia-based online grocery platform Nana raised $18m from a funding round led by Saudi Technology Ventures. Co-investors in the funding round included Middle East Venture Partners, Wamda Capital, Watar Partners and SVC, as well as the company’s existing angel investors.
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Stars: Toni Collette, Bella Heathcote, David Wenham, Omari Hardwick
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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
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UAE SQUAD
Ahmed Raza (Captain), Rohan Mustafa, Jonathan Figy, CP Rizwan, Junaid Siddique, Mohammad Usman, Basil Hameed, Zawar Farid, Vriitya Aravind (WK), Waheed Ahmed, Karthik Meiyappan, Zahoor Khan, Darius D'Silva, Chirag Suri
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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THE BIO
Ms Davison came to Dubai from Kerala after her marriage in 1996 when she was 21-years-old
Since 2001, Ms Davison has worked at many affordable schools such as Our Own English High School in Sharjah, and The Apple International School and Amled School in Dubai
Favourite Book: The Alchemist
Favourite quote: Failing to prepare is preparing to fail
Favourite place to Travel to: Vienna
Favourite cuisine: Italian food
Favourite Movie : Scent of a Woman
MATCH INFO
Asian Champions League, last 16, first leg:
Al Jazira 3 Persepolis 2
Second leg:
Monday, Azizi Stadium, Tehran. Kick off 7pm
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