Delivery Hero acquires Dubai-based InstaShop for $360m to expand into grocery delivery

Online food delivery service Delivery Hero is acquiring Dubai-based e-commerce site InstaShop for $360m, expanding into the fast-growing grocery delivery service.

Grocery delivery has emerged as one of the biggest e-commerce segments, as stay-at-home orders and anxiety over the coronavirus pushed shoppers online. InstaShop says it grew a whopping 330 per cent year-on-year in Q2 2020, generating $300 million in revenues.

The acquisition values the company at $360m, $270m upfront plus an additional $90m based on meeting certain growth targets. InstaShop says it will use the funds to expand into new markets and invest in further growth.

InstaShop’s business model is marketplace-based – it connects customers with vendors and facilitates the purchase, while the shops take care of the logistics. It currently operates in five countries: UAE, Qatar, Bahrain, Egypt, and Lebanon. It has approximately 1,500 vendors on its platform.

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Instashop was backed over the years by Jabbar Internet Group, one of the leading tech investors in the region, and VentureFriends, a European early-stage investor from Greece.

InstaShop will continue to operate as an independent brand under the current leadership. Joining Delivery Hero opens up future opportunities for expanding its footprint further afield. Delivery Hero operates in more than 40 countries.

InstaShop was founded by current CEO John Tsioris and CMO Ioanna Angelidaki in 2015 in Dubai. “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,” Tsioris said.

Delivery Hero owns both Talabat and Zomato food delivery brands in the UAE. Its competitors Careem and Deliveroo all offer grocery delivery services.