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‘Amazon of the Middle East’ raises $275M

Souq.com

Souq.com, dubbed the "Amazon of the Middle East", has raised $275 million in one of the biggest funding rounds for a company in the region.

Investors in the round include New York-based Tiger Global Management – an investor in Airbnb – as well as South Africa's Naspers, both of which were previous backers of the company. Standard Chartered Private Equity, IFC and Baillie Gifford, joined the round.

Souq.com is a cross between Amazon and eBay, stocking some of its own products but mostly being a marketplace for third-party sellers.

Co-founder and chief executive Ronaldo Mouchawar said the money would be used to expand the products available in categories from fashion to home items. In addition, the start-up will put a big emphasis on mobile transactions.

"We have a high mobile penetration in the region and we continue to focus on mobile capabilities," Mouchawar told CNBC in a phone interview.

"Over 50 percent of buyers shop through app or mobile web, so we are focusing on making that better, customizing it, making that more personalized. The shopping screen is smaller on mobile and you have to be more innovative."

The company is currently active in the UAE but is slowly entering further countries in the region including Bahrain, Oman and Kuwait as well as Egypt, but does not plan to move beyond the Middle East for now.

Mouchawar said the e-commerce market is expected to reach $20 billion this year, with Souq.com hoping to dominate. It has acquired a number of companies including payments firm PayFort. It also has its own last-mile delivery service to fulfil orders.

"With that ecosystem we will improve the customer experience," the co-founder said, adding that "there will be a few more" acquisitions coming to fuel the firm's growth.

Mouchawar did not disclose the valuation of the company after several reports suggested it was $1 billion, allowing Souq.com to join the ranks of "unicorns" such as Airbnb and Xiaomi . But the chief executive did reveal that over the last two years, the company's revenues have grown 100 percent on average per year, allowing them to raise such a big round of funding.

"It has grown extremely fast hence the amount of capital we have raised," Mouchawar told CNBC.