Strong advertising revenue potential driving investments in online classifieds platforms across the globe
The Dubai-headquartered NBK Capital Partners – an alternative investments firm that advises on providing flexible growth capital to mid-sized companies in the Middle East, North Africa and Turkey – has advised on the investment by Raptor Equity Ventures Limited in 4Sale, the market-leading online classifieds portal in Kuwait.
With over one million active users and monthly page views of 400 million, the Kuwait platform – owned by the Falcon Group – is a highly successful online listing and advertising portal, benefiting from the global upswing in listings advertising, which is expected to increase at an annual rate of 8%.
Due to the strong revenue potential that online classifieds platforms present and the high barriers to entry compared to other fast-growing technology businesses, the industry has secured investment from a number of global private equity firms in recent years.
Yaser Moustafa, Senior Managing Director at NBK Capital Partners, said: “We were attracted by the opportunity because of its strong market position and the significant potential for growth that the market offers. We also are excited to partner with a very strong management team which has deep market knowledge, sound operating skills and the technical expertise to capitalize on this sector’s strong fundamentals.
“Given our experience in successfully managing and scaling consumer-facing businesses, we are confident we can maximize the opportunities that exist for 4Sale in Kuwait and the region.”
Tarek Sakr, CEO and Founder of Falcon Group, said: “This transaction marks an important milestone in the Falcon Group’s history which was achieved by hard work and consistently delivering quality solutions to our customers. Through NBK Capital Partners we have found a like-minded partner who shares our values of innovation and hard work, as well as the commitment to take the company to its next level of growth both locally and regionally.”
In the Middle East and North Africa, the contribution of digital to GDP has substantial room to grow from the current 4.1%, evidenced by a digital market growth forecast, to over 19% in the next few years. The Kuwaiti market is particularly appealing for online classifieds and well positioned to benefit from the digital market growth given an internet penetration of 78% and a high mobile penetration at 185%, which has been driving the rapid shift from offline to online classifieds.
King and Spalding, International Counsel Bureau and Matouk Bassiouny acted as the legal advisors for NBK Capital Partners, while PWC and European Internet Ventures acted as financial and commercial advisors, respectively. Arqaam Capital and Meysan Partners acted as the financial advisor and legal advisor, respectively, for Falcon Group.