Noon.com is set to draw as much as $2 billion in financing from investors including Saudi Arabia’s Public Investment Fund over three to four years, as it seeks to capture a larger slice of the Gulf e-commerce market.
As reported by Bloomberg, the investments from the Public Investment Fund and others will be used to upgrade infrastructure and help speed up deliveries, Noon founder Mohamed Alabbar said e-commerce currently accounts for 2% to 2.5% of total retail in the region, compared with 20% to 22% in the western world and China.
Noon operates in the United Arab Emirates, Saudi Arabia and Egypt and is looking to expand in other nations across the Middle East. The PIF, as the Saudi wealth fund is known, declined to comment.
“We have a long way to go,” Alabbar said. “There is a lot of room for growth and a lot of countries to cover.”
Alabbar, who owns 50% of Noon jointly with other regional private investors, raised $1 billion from backers including the PIF to create the firm in 2016. It now has about 4 million daily users and growth is accelerating as it pushes into grocery delivery.
“Traffic is growing on a monthly basis,” Alabbar said. “We’re easily doubling every year and the volume of package delivery is up almost 2.5 times.”
The Bloomberg report states how new funding for Noon comes amid a wave of tech investments in the region. In June, a PIF unit led a new financing round for Jordan-based online classifieds business OpenSooq.com, which is looking to triple headcount across the Middle East. Sanabil, another unit of the wealth fund, led a $35 million funding round for Dubai-based online car trader SellAnyCar.com last year.
That followed a series of landmark deals including Amazon’s acquisition of e-commerce platform Souq.com and the sale of ride-hailing app Careem to Uber Technologies Inc.