Talabat, the Middle Eastern arm of Delivery Hero, is set to go public on the Dubai Stock Exchange in mid-December, according to a statement from the German food delivery giant on Sunday.
The initial public offering (IPO) is taking place amid a surge in retail spending in the Gulf region and a wave of public listings, as regional governments strive to reduce their reliance on oil revenues. Last week, Lulu Retail, a hypermarket chain operator, raised $1.72 billion through its IPO.
Founded in Kuwait in 2004, Talabat has grown to serve customers across the United Arab Emirates (UAE), Oman, Qatar, Bahrain, Jordan, Iraq, and Egypt. As of the end of July, the company reported over six million active customers. In addition to food delivery, Talabat offers services for groceries and other goods, including health and beauty products.
Delivery Hero, a Berlin-based online food delivery company, acquired a majority stake in Talabat in 2015. In August, the company announced its intention to retain a significant stake in Talabat, with analysts suggesting that the IPO could help reduce its debt. Delivery Hero's shares listed in Frankfurt have declined by over 74% from their January 2021 peak, driven by pandemic-related demand.
Jefferies analyst Giles Thorne described the IPO as a "highly positive catalyst" for Delivery Hero's equity, citing "very low execution risk" and a potential material reduction in the company's debt. Thorne also noted that Talabat is "one of the highest, if not the highest quality on-demand delivery platforms globally," with a valuation of 11.5-13.5 billion euros.
Talabat's regional competitors include Saudi Arabia's Jahez and Careem, which is owned by Uber Technologies. Delivery Hero CEO Niklas Östberg declined to comment on the IPO during an interview with Reuters on Thursday, following the company's third-quarter earnings report.
Delivery Hero's gross merchandise value (GMV), which measures the total value of goods sold, increased by 30% in the Middle East and North Africa (MENA) region, its fastest-growing market. The company operates in the MENA region through subsidiaries Hungerstation, Yemeksepeti, and InstaShop, which together accounted for over a quarter of the group's overall GMV in the period.
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