Dubizzle, Bayut to merge, forms Middle East’s only unicorn startup, $1 bln valuation
Dubizzle-owner OLX Group is set to merge its UAE, Pakistan, Egypt and Lebanon businesses with Bayut-owner EMPG.
OLX will also lead a $150 million investment round for EMPG, creating a unicorn company, a phrase used to refer to a privately held startup company valued at over $1 billion. OLX will retain a 39 percent share of the company, making it EMPG’s largest shareholder.
“We, at Bayut and EMPG, are very excited about the future of the UAE real estate industry and the prospects of real estate in the MENA region … At the same time, we will be making significant technology investments to provide more value to all users of property, automotive and other segments of the Dubizzle and OLX platforms,” Haider Ali Khan, Head of EMPG – MENA said in an emailed statement to Al Arabiya English.
EMPG in a statement said it would use the new capital to develop a range of new services and improve the user experience.
“I'm proud of what we have built in these four markets. Our brands are household names, and currently help tens of millions of people to exchange goods and services every month. The next phase is an exciting one, with EMPG’s real estate industry expertise helping deepen the customer experience,” said CEO of OLX Group Martin Scheepbouwer.
EMPG currently operates in the GCC with its Bayut platform, in Pakistan with Zameen, Bangladesh with Bproperty, Morocco and Tunisia with Mubawab, and Thailand with Kaidee. After the merger the company will operate OLX’s platforms in Pakistan, Saudi Arabia, Bahrain, Kuwait, Qatar, and Oman, and the dubizzle platform in the UAE, along with an expansion into Egypt and Lebanon.
Coronavirus plunges MENA startup appetite
The COVID-19 coronavirus has severely curtailed investor appetite for startup investment deals in the Middle East and North African (MENA) region, a report from startup data platform MAGNiTT showed earlier this month.
In 2019, the region experienced a blockbuster year, with total funding hitting $3.8 billion, headlined by ride-sharing platform Careem, which sold to Uber for $3.1 billion. Careem's sale to Uber is the largest startup deal in the Middle East yet.
A survey conducted by MAGNiTT found that around 59 percent of startup founders have already had their business impacted by the coronavirus, with nearly half citing revenue generation as their major concern.
Over 40 percent expect lower-than-expected revenue growth rates in 2020, and 29 percent anticipate that their revenue will fall below 2019 figures.
Prior to the pandemic, MENA startups started 2020 very positively. Over the first quarter of 2020, including March, funding rose 2 percent year-on-year, with big funding rounds for Kitopi, a cloud kitchen platform, Vezeeta, an Egyptian online medical scheduling service, and SellAnyCar, a Middle East car buying service, leading the way.
These initial successes for the sector later slowed as the coronavirus took hold, prompting widespread business slowdown.