Cobone, one of the biggest daily deals companies in the Middle East with over 2 million subscribers, has been acquired by Tiger Global Management, a New York investment firm whose early stage investment sheet includes Facebook, Zynga and LinkedIn. The deal buys out the stakes of management and Jabbar Internet Group, and leaves Cobone with additional capital for further expansion in the region.
“This deal represents the international recognition of a highly successful local business,” stated Samih Toukan, Chairman of Jabbar Internet Group. “With Paul Kenny, we created a company that led 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.”
Though the price of the deal was undisclosed, Zawya pegged the price between $20 million to $40 million, citing sources close to the deal. The deal was a mix of cash and equity stakes for the management, and retains founder of CEO Paul Kenny, head of strategy and sales Pieter Sleeboom, and marketing head Warwick Godfrey.
“This deal represents a very exciting future for Cobone as it reaffirms its commitment to the Middle Eastern market and e-commerce industry,” Kenny said. “Tiger Global gives us the international clout and the financial resources to expand regionally and surpass already high customer expectations.”
Like other daily deals sites like Groupon and LivingSocial, the company’s revenue is overshadowed by its expenses. The company posted an overall loss despite earning $32 million. It plans to restructure its operations to hopefully profit this year. Founded in 2010, the company has grown to become the largest daily deals site in the Middle East with operations in operations in the United Arab Emirates and Saudi Arabia.
It has maintained its position from LivingSocial, which forayed into the Middle East through its purchase of GoNabit in June of 2011, and then shut down operations in the region a year later.
Ecommerce has been slow to catch on in the Middle East. When Cobone first launched in 2010, the majority of its shoppers simply ordered on the site and paid cash on delivery due to the lack of a cohesive payments option in the region.