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.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Management

How to Become a Resilient Entrepreneur in 4 Steps

By focusing on small steps to achieve your goals, embracing challenges as growth opportunities, and building a strong network of peers, you can effectively navigate adversity and learn from each experience.

Starting a Business

The Mindset that Helped Me Start 5 Companies Before Age 30

If you were completely rational, you would never attempt anything.

Business Solutions

Cut Software Costs Without Losing Essential Tools: MS Office Is on Sale for Life

Spend less than $40 on Microsoft Office 2019 lifetime licenses for Mac or Windows.

Business News

No Meetings, Up to $30 Per Hour, Fully Remote: A College Student Training AI Says the Work Is 'Perfect' for Introverts

He works 30 hours a week without a direct boss, daily meetings, or contact with coworkers.

Science & Technology

What Is 'AI Tasking'? Entrepreneurs Are Using This Viral Strategy to Save 3 Days a Week

Want to 10x revenue without hiring? AI automates marketing, saving you 3+ days/week. Learn 4 AI tools for content, chatbots, leads & sales. Get the free 'AI Success Kit' + a chapter from Ben's new book!