Middle East’s homegrown digital marketplace, Noon.com is all set to raise about $2 billion in funding from investors including Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF) over three to four years, as it seeks to expand its eCommerce business in Gulf region.
Even though the movement restrictions and lockdown imposed to control the spread of the coronavirus pandemic have accelerated the shift to online shopping and food delivery in the Middle East, the region has been slower to adapt to eCommerce when compared to the rest of the world.
According to the statement from Mr. Mohamed Alabbar, founder of Noon, the investments from the PIF and other investors will be used to upgrade infrastructure and help speed up deliveries. “They are happy with our progress and they are happy to fund,” he added.
Mr. Alabbar said eCommerce currently accounts for 2 percent to 2.5 percent of total retail in the region, compared with 20 percent to 22 percent in the western world and China.
Noon operates in the UAE, Saudi Arabia and Egypt and is looking to expand in other nations across the Middle East. “We have a long way to go. There is a lot of room for growth and a lot of countries to cover,” Mr. Alabbar stated.
Mr. Alabbar, who owns 50 percent of Noon jointly with other regional private investors, raised $1 billion from backers including the PIF to create the firm in 2016. The new financing support for Noon would come amid a wave of tech investments in the region.
Noon now has about 4 million daily users. “Traffic is growing on a monthly basis. We’re easily doubling every year and the volume of package delivery is up almost 2.5 times,” Mr. Alabbar said.
Related: Emirates Post brings out 5 new services to improve customer experiences