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DFM-listed Talabat acquired 100% of Dubai-based on-demand grocery delivery marketplace Instashop from its parent company Delivery Hero, according to a statement (pdf) released on Thursday. Instashop will continue to operate as an independent brand, under Talabat’s grocery and retail vertical. The sale and purchase agreement was first announced in September 2024 and is part of a wider restructuring push, according to the statement.
The cash-based transaction was valued at USD 32 mn, which was financed by Talabat’s internal reserves, with the amount reflecting Instashop’s capital amount rather than its fair value, the statement reads.
Good news for Talabat’s public shareholders? The purchase price is a discount from the valuation price (USD 360 mn) at which Delivery Hero bought Instashop back in 2020. This could be viewed favorably by the public shareholders of Talabat, which took a 20% stake to market in a USD 2 bn IPO in December 2024. It’s noteworthy that the valuation amount was paid by Delivery Hero through an initial payment of USD 270 mn, while the remaining amount was tied to Instashop’s future performance through an earnout clause.
Creating a platform company: This kind of restructuring model is typically aimed at achieving certain synergies within portfolio companies, making one of them (Talabat) a platform company in a bid to strengthen its market position and financial health.
Potential synergies: While Talabat expects the transaction to result in operational and technology synergies across both businesses, there’s no publicly available information about the potential cost and revenue synergies, if any. The statement mentioned that integration processes are already underway — which typically includes structural and cultural alignments.
Cementing its market position: The transaction is expected to push Talabat’s grocery and retail segment’s gross merchandise value (GMV) beyond the USD 2.5 bn mark. Instashop’s GMV rose 16% y-o-y to USD 631 mn last year — equivalent to 8% of talabat’s total GMV of USD 7.4 bn in 2024 — with positive and improving EBITDA margins, according to the statement.
