Two investment companies are tying up to provide funds and market access to an e-commerce start-up.
iMena Holdings and the digital start-ups investor Rocket Internet will help to launch the Middle East operations of Hellofood.com, a site for ordering from restaurants online.
Also known as Foodpanda in some markets, the Berlin-based Hellofood says it has raised more than US$20 million from investors such as the Swedish investment company Investment AB Kinnevik and the Moscow venture capital firm Phenomen Venturesover the past year. iMena has invested $6.5m in Hellofood. Rocket Internet is also an existing investor.
iMena will have equal ownership with Rocket Internet in Hellofood's Middle East operation, which was first launched in Saudi Arabia four months ago. The partnership will help to expand Hellofood to 10 countries in the Middle East, including the UAE, where it is expected to launch by the end of the year.
The success rate of start-ups in the Arabian Gulf region is quite high, said Eyad Alkassar, the managing director for the Middle East and North Africa at Rocket Internet, and the co-founder of Namshi.com, an online fashion retailer.
"We have a young population with high income and less competition from traditional and offline services here as compared to say Europe," he said.
Rocket Internet, which started in Germany in 2007, typically invests several million euros in a company, gets full ownership of the company and hires the management team to run it.
It now invests in more than 100 companies and is present in 40 countries, including the UAE, with offices in Dubai, Jeddah and Riyadh in the region.
With Hellofood, "we are building the 21st century food court", said Khaldoon Tabaza, who is iMena's co-founder and managing director.
The online food ordering business has a presence in 28 countries in Latin America, Asia and in Central and Eastern Europe.
iMena is largely supported by private companies from the region and outside, and has Etisalat Group as one its investors. Launched in March, it has invested $15 million in six companies, with four of them from Dubai, apart from its investment in Hellofood.
"We look at whether the business is in demand and at the business model," Mr Tabaza said. Among the companies it has invested in are Opensooq.com and the restaurant booking service Reserveout.com.
Among Rocket Internet's investors are JP Morgan, Investment AB Kinnevik and the French company Kering, formerly PPR, which is the parent company of Gucci.