Amazon.com has reportedly inked a deal to buy Souq.com, the Dubai online retailer, reported Reuters. Citing sources familiar with the deal, Reuters reported Amazon is purchasing 100 percent of Souq.com. Both companies declined to comment to Reuters.
Reuters reported that Goldman Sachs acted as adviser for Souq.com on the deal and help arrange it. By acquiring Souq.com, Amazon gets one of the most well-known online retailers in the Middle East. Souq.com sells everything from consumer electronics to household products. It also sells fashion and other items on its website. The price tag for Souq.com wasn’t disclosed, noted the report.
Thanks to a young and tech-savvy population in the Middle East, the technology sector, which includes eCommerce, is growing at fast clip. Reuters noted Kuwait, Saudi Arabia and the United Arab Emirates are among the top seven countries worldwide in terms of smartphone penetration. The Middle East eCommerce startup raised $275 million in venture funding 2016 with proceeds going to support growth of the company. Tiger Global Management, Naspers, Standard Chartered Private Equity, International Finance Corporation and Baillie Gifford participated in the round of funding last year.
Earlier this month Bloomberg reported that Amazon had restarted talks with Souq.com. According to the report, sources told Bloomberg discussions between the two reignited over the past few weeks. In January Amazon and Flipkart Online Services reportedly gave up on a deal to buy Souq.com for $1 billion. The report noted Souq.com sells greater than 1.5 million products online. Bloomberg reported in November that talks between Amazon and Souq.com were focused on Amazon paying around $1 billion to gain access to a high-growth market in the Middle East. Citing people familiar with the matter, Bloomberg said Amazon is mulling making an offer for all of Souq.com, which originally was looking to sell around 30 percent of the company.