Saudi group acquires Dubai-based Mumzworld in female-led deal | Business and Economic News
A Saudi conglomerate is acquiring Mumzworld, the Dubai-based online children’s products retailer described as the first “female-led e-commerce transaction” in the Middle East.
A Saudi conglomerate will acquire the largest online children’s product retailer in the Middle East, which highlights the growth of e-commerce in the region amidst increasingly fierce business competition.
Dubai-based Mumzworld said on Monday that it had signed a sale and purchase agreement with Jeddah-based Tamer Group, saying it was the first “female-led e-commerce transaction” in the region. Financial details were not disclosed.
Its co-founder and CEO Mona Ataya stated that the transaction will provide Mumzworld with resources and networks to “continue to drive our growth” in terms of geographic and product supply.
“We are a local company,” she said in an interview. “Therefore, this acquisition of the strategic giant is our right DNA and the right strategic fit.”
As competition with Amazon and its regional rival Noon.com backed by the Saudi Wealth Fund intensified, the deal increased risk, and Indian children’s product site FirstCry.com also expanded its footprint in the Middle East. According to reports, the Indian company was valued at US$2.1 billion in a financing round earlier this year, and SoftBank Group is one of its largest investors.
Over the past decade, online retailers have sprung up in the Middle East and expanded further when the pandemic forced people to stay at home basically and rely more on Internet shopping.
However, despite the huge growth potential, fierce competition and weak economic growth have put several e-commerce startups in the Gulf region into trouble. Despite raising millions of dollars in funding, Sprii, an online seller of baby products, and The Modist, a fashion startup, both went bankrupt. Another Dubai-based platform, Awok.com, announced its closure last year.
Mumzworld claims that the Middle East market for maternal, infant and child products is worth more than 10 billion U.S. dollars. It is estimated that although the online penetration rate is still relatively low, below 10%, the online segment is growing by about 39% annually.
Ataya said that this and the promotion of more online shopping will further promote the development of e-commerce companies such as Mumzworld.
Ataya said that during the global pandemic, the demand for basic baby products “increased significantly” and the company has responded well to supply chain issues caused by the epidemic. She also stated that the region’s strong birth rate and young population will ensure the future growth of companies such as Mumzworld.
Ataya declined to say whether the company is profitable, but said the company has raised $50 million in funding so far. Its largest market is the United Arab Emirates and Saudi Arabia, the region’s largest economy.
The company’s backers include venture capital firm Wamda Capital and Gulf Islamic Investment Co., Ltd., the latter is a financial services company whose investment in 2018 made it the largest shareholder of Mumzworld at the time.
With annual revenues of 9.2 billion riyals (2.5 billion US dollars), Tamer Group is a large regional healthcare distributor, including consumer and nutrition departments and logistics services.
Mumzworld was founded in 2011 by Ataya and Leena Khalil, both of whom will “remain important shareholders” and serve on the board of directors. The company offers 250,000 products from 5,500 brands.
(The last third paragraph updates GII’s investment and shareholding situation.)
-With the help of Matthew Martin.