⚡ Get All Content for 20% Off ⚡

UAE-Based Online Grocery Startup InstaShop Raises Funds From Souq.Com As the sole investor participating in this round of funding, Souq takes "a significant minority stake" in InstaShop.

By Sindhu Hariharan

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Souq.com
Left to Right: Ronaldo Mouchawar, co-founder and CEO, Souq.com with John Tsioris, founder and CEO, InstaShop

Hyperlocal grocery ordering app InstaShop has raised an undisclosed amount of funding from Souq.com, the region's e-commerce major. As the sole investor participating in this round of funding, Souq takes "a significant minority stake" in InstaShop. Launched in June 2015 in UAE's competitive on-demand e-grocery market, InstaShop counts over 50 supermarket chain partners and claims to fulfill "tens of thousands of orders" for a base of 60,000+ active users. InstaShop plans to deploy the funds "to speed up" expansion in the MENA region, to accelerate their growth, and also invest in "technological innovation" to enhance the app user experience. Jabbar Internet Group and VentureFriends are InstaShop's existing investors from previous rounds.

In a statement on the funding, Souq says that the investment is driven by a view to "further expand its offering in the fast-growing FMCG and grocery categories, leveraging on its current user base." Ronaldo Mouchawar, co-founder and CEO, Souq.com says, "InstaShop has a strong concept and platform in its own right, but by utilizing our leading logistics app, it is looking to further grow its presence in Dubai and the other Emirates." Speaking about the process, InstaShop founder and CEO, John Tsioris says that the deal was sealed after being in touch with Souq.com "for many months" and was a result of Souq's interest in the groceries vertical. "The best part about Souq.com investing in InstaShop is the fact that we'll have the largest online retail platform in the Arab world by our side, an experienced strategic player to provide guidance and offer valuable resources, such as their enormous user base," says Tsioris.

InstaShop App. Image credit: InstaShop.

With a "rather straightforward" approach to arriving at the valuation, Tsioris is pleased to note that the process was free of intense negotiations in this regard, and says that Souq's marketplace model also helped InstaShop to welcome an investor without "conflict of interest" with their existing retail partners. "With Souq.com, it was clear that our business approach and chemistry blended well, they wanted to enter into groceries and they liked the way we do it." Operating as a typical on-demand service application, InstaShop is available on both Android and iOS, and says that it can deliver groceries to customers in "30 to 60 minutes" (depending on location). The users can choose the products on the app, which provides for both credit card payment and cash on delivery option.

With increase in the acceptance of e-commerce in the Middle East, and with a growing population of a consumer class seeking convenience in the quickest means, online grocery has seen improved adoption in the UAE, and the region as a whole. Even as large supermarket chains have added omni-channel capabilities by expanding their online services, many tech startups enabling grocery e-retail are giving them close competition.

Related: Logistics Startup WING.ae Raises Seed Funding From Souq.com

Sindhu Hariharan

Former Features Editor, Entrepreneur Middle East

Sindhu Hariharan is the Features Editor at Entrepreneur Middle East.  She is a financial consultant turned business journalist with a FOMO when it comes to everything technology.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Leadership

If You Want to be Successful, Become a Better Speaker — Follow This 7-Step Process for Effective Speaking

Discover the transformative power of mastering presentation skills with this 7-step process.

Starting a Business

She Started a Side Hustle While Working 2 Jobs as a Line Cook for $22 an Hour Combined — Now It's an 8-Figure Brand You've Probably Seen on TV

Ellen Bennett, founder of kitchenware brand Hedley & Bennett, had a big idea in 2012 — and the "willpower and chutzpah" to bring it to life.

Entrepreneurs

Startup Spotlight: UAE-Based Uktob Is Ensuring Arabic-Speaking Businesses Have Easier Access To Artificial Intelligence

Among the AI tools Uktob offers, there is one that is named Faheem, an AI-powered personal assistant that offers a range of productivity tools and services for day-to-day tasks.

Entrepreneurs

Startup Spotlight: Saudi Arabia-Based Uvera Is Here To Rid You Of Your Food Spoilage Woes

Uvera's main product, Aurora, is a next-generation artificial intelligence of things device that can increase the shelf-life of fresh food up to 97% on average, within only 30 seconds and without using any chemicals.