Amazon's Acquisition of Dubai Based E-Commerce Company Souq.com
In this episode of TechTalk, we discuss recent mergers and acquisitions in e-commerce including Amazon's recent acquisition of Souq, a Dubai based e-commerce company. Souq had other interested parties such as a local mall developer who ended up backing Noon - another Middle Eastern e-commerce site and Souq competitor.
Why is this an important tech acquisition for Amazon? Not only are they entering a market with significant growth potential but geographically there might be a showdown between Amazon and Alibaba in the rapidly developing Indian market. It looks like things are looking pretty rosy for Amazon’s CEO Jeff Bazos who just passed Warren Buffet to become the second wealthiest person on the planet.
Dave Plaskow: Hello and welcome to EisnerAmper’s Technology podcast series. With more than 500 technology clients, we’re always interested in the latest trends and developments as well as any related business and accounting opportunities and challenges. Today we’re talking about Amazon’s acquisition of Middle Eastern e-commerce company Souq. I’m your host Dave Plaskow and with us today is Dave Katz, senior audit manager in EisnerAmper’s technology and life science practice. You know it, you love it, it’s TechTalk. Dave, greetings and salutations.
Dave Katz:Dave, good to be here again.
DP: So Dave, it looks like Amazon has taken another step on its way to global domination.
DK: Yep, here we are talking Amazon again in their acquisition of Dubai based Souq.com.
DP: Tell us a little bit about Souq.
DK: Sure, so founded in 2005 by Syrian entrepreneur Ronaldo Mouchawar, has about 45 million monthly online visitors and sells more than 8 million products to the UAE, Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and Egypt - company valued at about a billion dollars and has 3000 or so employees
DP: Ok, so that’s decent sized company. What does the deal look like?
DK: So terms weren’t yet disclosed but it’s estimated the deal is valued between $615 - $800 million. Interestingly Amazon was only looking to acquire about a 30% stake, and then it went all in and did the whole thing here, so. Goldman Sachs who handled the deal called this the biggest ever technology M&A transaction in this part of the world.
DP: Ok. And Souq had a few other interested parties, correct?
DK: Yeah, there were a few others - eBay, some other local retail groups were kicking the tires here, and the Dubai based Maude developer reportedly made an $800 million offer and that developer is now backing another Middle Eastern e-commerce site, Noon, which hopes to go live this year.
DP: Ok, so a lot of e-commerce activity in that part of the world. What is the Middle Eastern E-tail landscape look like?
DK: So currently only about 2% of retail purchases there are made online, which seems like a low number, but online sales growth is expected to grow at about 30% annually and eclipse $27 billion by 2020. So that’s due to a growing population of younger tech oriented customers, and you see the rest of the world where a lot is going to the internet.
DP: Sure sure, a lot of room for growth there. Now why is this an important acquisition for Amazon?
DK: Yeah, so, they’re entering a market with significant growth potential like I mentioned, and then geographically you may be looking at a showdown between Amazon and Alibaba in the rapidly developing Indian market.
DP: Yup, a couple of powerhouses there. So it looks like things are looking pretty rosy for Amazon’s CEO Jeff Bazos these days.
DK: Yeah, you could say that. He just passed Warren Buffet to become the second wealthiest person on the planet. Net worth of somewhere around $75 billion.
DP: Wow, yeah, that’s certainly nothing to sneeze at.
DK: Nope.
DP: Well gracias Dave, again, as always for your insights.
DK: Thanks for having me Dave.
DP: And thank you for listening to TechTalk as part of the EisnerAmper podcast series. Visit EisnerAmper.com for more information on this and a host of other topics. And join us for our next EisnerAmper podcast when we get down to business.
EisnerAmper’s Technology and Life Sciences practice talks about the Theranos dissolution, and what took them from biotech unicorn to dissolution. Investors must use due diligence and consider a company's internal controls before investing in companies with high valuations.
EisnerAmper's Technology podcast series discusses the proposed New York City Council cap on the number of ridesharing vehicles such as Lyft and Uber in Manhattan to ease congestion. How will this cap change Uber's valuation, and what is the economic hit to the taxi industry?
This episode of the Dave & Dave Show discusses new cryptocurrency technology from the fintech startup company Circle, called USD Coin. This cryptocurrency ties itself to the U.S. Dollar, therefore eliminates some volatility that comes with crypto mining and Bitcoin.
TechTalk takes a look at a tech startup, Aerobotics, that is using drones to help farmers in South Africa. This podcast discusses how the drones help South African farmers, how the US government is using drones and how MIT is making micro drones.
TechTalk discusses a new 3d printed community proposed in El Salvador by the nonprofit New Story and ICON construction. Icon and New Story debuted their 3D printed house at the Austin South by Southwest festival. Issues discussed include cybersecurity and valuation.
Life Science Partner Dave Katz discusses the new 23andMe DNA testing kit for breast cancer BRCA1 and BRCA2 gene mutations approved by the FDA, and what it means for the biotech industry. The FDA approved 23andMe DNA breast cancer test increases access to health care information.
TechTalk examines Jeff Bezos' new possible Amazon facility cities of Austin, New York City, Washington DC and Atlanta, with Atlanta being Dave Katz' first pick. They also discuss Amazon Go, and Amazon's healthcare initiative with Berkshire Hathaway.
EisnerAmper’s technology podcast discusses the first FDA approved EKG band for the Apple Watch. Dave Katz of the Technology and Life Sciences practice discuses these new medical devices, their use of artificial intelligence and the cybersecurity issues surrounding them.
EisnerAmper’s technology podcast discusses related business and accounting opportunities with the senior manager in its Technology and Life Sciences practice about Uber, drones, internet providers and net neutrality, IPOs, AI and the R&D credit that may expire next year.
Is AI Destined to Replace Fund Managers? This episode of TechTalk talks about the first ETF powered by artificial intelligence (AI), the technology behind it, if it impacts a fund’s expense ratio and, most importantly, how it’s performing.
It was a milestone when Facebook implemented facial recognition software in 2010. The iPhone X has put a renewed spotlight on facial recognition technology. EisnerAmper’s Technology and Life Sciences Manager discusses security issues surrounding facial recognition technology.
Supersonic air travel is coming back with a boom. What does today’s market look like for supersonic air travel and how are start-ups such as Boom and Aerion navigating the many challenges? Also discussed is mergers and acquisitions and the need for valuations.
Is iRobot’s Roomba automated vacuum collecting consumer data that will be offered to technology companies to enhance internet of things devices? Here is what information is being collected, potential data privacy and security issues, and iRobot’s response to consumer concerns.
Tesla has received a significant investment from Chinese tech giant Tencent. This podcast discusses what Tesla plans to do with the cash infusion, Tencent’s ownership stake and how this could help both companies enter the highly coveted self-driving car market.
With retiring baby boomers some of the fastest growing jobs in technology attracting tech talent are located in New York City, San Francisco, Austin and Seattle. Tech talent can come from non-traditional backgrounds and there is strong hiring growth in hubs such as New York City.
Amazon Go wants to streamline your grocery shopping. This podcast discusses Amazon’s plan to use 'Just Walk Out Technology' to change food shopping. A look at the technology behind Amazon Go, potential speedbumps and what it could mean for bricks-and-mortar grocery chains.
David in EisnerAmper’s Technology and Life Sciences Practice, gives a “state of the union” on self-driving cars, an overview of Uber’s unique experiment in Pittsburgh, and a glimpse of what we can expect in the marketplace over the next few years.
This episode of TechTalk we discuss the commercial real estate shortage for the nation’s biotech sector. Life science and biotech companies in hubs like Boston and San Fran are seeking out real estate in the suburbs in order to afford space to expand their businesses.
This Life Sciences and Technology podcast talks about the space-age technology called the Hyperloop. The Hyperloop could take people from LA to San Francisco in 35 minutes, and was originally conceived by Elon Musk. Hyperloop One is the first company to develop the technology.
David discusses the commercial drone market, including how the FAA will regulate pilot licenses, drone use in real estate, Amazon's use of drones for future deliveries, the VC market and M&A strategies for companies interested in investing in drone technology.
David discusses virtual reality including Facebook's acquisition of Oculus, HTC's Vive and revenue recognition that comes from virtual reality technology. HTC has created the Vive X Fund and Facebook has created a similar fund to help develop virtual reality software.
