Talabat fully acquires Instashop from parent company Delivery Hero for USD 32 mn

Talabat, listed on the Dubai Financial Market (DFM), has acquired 100% of the Dubai-based online grocery delivery platform, Instashop, in a USD 32 million related-party transaction. The seller is Delivery Hero, Talabat’s Berlin-based parent company and majority shareholder. This acquisition is part of a strategic restructuring initiative aimed at enhancing operational efficiencies within Talabat's grocery and retail sectors. Instashop will continue to operate under its own brand within Talabat's organizational structure.

The transaction was financed entirely through Talabat’s internal reserves, indicating a strategic use of company resources. The acquisition cost is based on Instashop's capital amount rather than its market value. Previously, Instashop was valued at USD 360 million in 2020 when Delivery Hero purchased it. The acquisition terms included USD 270 million paid upfront with additional payments contingent on Instashop’s future performance. Instashop currently operates in the UAE and Egypt, contributing positively to Talabat’s regional footprint.

Talabat’s recent IPO in December saw a 20% stake listed on the DFM, raising USD 2 billion, which underscores the company's robust financial position and strategic growth ambitions.

The acquisition is expected to create significant operational and technological synergies, particularly in streamlining delivery and product operations. This integration process is actively underway and aims to optimize the combined capabilities of Talabat and Instashop.

Financially, the acquisition has positioned Talabat’s gross merchandise value (GMV) at USD 2.5 billion for 2024 on a pro forma basis. Instashop's contribution to this figure was notable with its GMV increasing by 16% year-over-year to USD 631 million in the last year, which represents about 8% of Talabat's total GMV for 2024. This performance is also reflected in Instashop's positive and improving EBITDA margins.

Despite these promising developments, Talabat’s stock experienced a slight decline of 0.7%, closing at AED 1.53 on Thursday following the announcement. This market reaction may reflect initial investor caution as they assess the long-term benefits of the acquisition against the immediate financial outlay and ongoing integration efforts.

Tomaso Rodriguez, Chief Executive Officer of talabat, commented: “We are thrilled to welcome instashop into the talabat family. The acquisition supports and complements our strategy to grow our Grocery and Retail offering and is a testament to our commitment to enhancing customer experience and providing customers with even greater choice and convenience. By integrating instashop’s innovative platform into our operations, we aim to create a more seamless and efficient delivery experience for our customers across the UAE and Egypt whilst also driving further product and technology synergies across our business. Together, we will unlock new opportunities for growth and innovation, setting a new standard in the online grocery and retail sector.”

Nikola Cabarkapa, Chief Executive Officer of instashop, commented: “Joining forces with talabat marks an exciting new chapter for instashop. We have always been dedicated to connecting our users with their favorite local stores, and now, with talabat’s support, we can amplify our impact even further. This partnership will enable us to leverage talabat’s extensive network and operational expertise, allowing us to enhance our service delivery and continue our mission of providing exceptional convenience to our customers. We are excited about the significant customer and partner benefits this collaboration will bring and look forward to a successful journey ahead.”