Amazon has confirmed its acquisition of Dubai-based ecommerce company Souq.com for $580 million, as per the company’s filings with NASDAQ. The development comes months after Amazon was said to be in talks to buy Souq.com for a reported price of $1 billion in November last year. Bloomberg had reported that Flipkart too showed interest in Souq.com, but later pulled out of the deal. This is Amazon’s second confirmed acquisition in 2017.
This TechCrunch report pointed out that Amazon users can now log on to Souq.com using Amazon credentials itself. Both companies plan to merge their services and operations, especially on the Amazon Global Seller segment, the report added.
Souq.com has also been in talks with Majid Al Futtaim Group, a UAE based mall and retail business operator, added the report. The company had raised $ 275 million in funding from Tiger Global, Naspers, Standard Chartered Private Equity, and others in February last year. Note that Tiger Global and Naspers both are both investors in Flipkart. In total Souq raised more than $400 million in funding across 4 rounds since its first round in 2012.
Souq currently has operations in UAE, Egypt and Saudi Arabia. The Dubai-based company also investments in three other startups. In October last year, it invested an undisclosed amount it InstaShop, a grocery delivery app based in UAE. In the same year, logistics startup WING.ae raised an undisclosed amount from Souq.com.
Amazon’s acquisition of Whole Foods and focus on offline
The Souq.com acquisition comes just days after it Amazon made a giant acquisition in the offline space. Last month it paid $13.7 billion for Whole Foods Market Inc., an organic-food retailer signifying that Amazon is serious about its offline initiatives. The company recently rolled out two offline projects—a brick-and-mortar bookstore named Amazon Books and grocery store AmazonFresh.
Amazon’s investment in India: Amazon has also been investing heavily in India; it recently received a wallet license from the RBI and has already diversified its business into sectors like grocery delivery, Video, and payments. Its core business segment, ecommerce, is already leading the market in terms of sales with a GMV of above $300 million as of August last year according to Forbes. In India, Amazon has invested close to Rs 2010 crore, with an overall commitment of Rs 7,000 crore in FY16.