Food & Drink

Talabat profits soar ahead of planned IPO

November 8, 2024, 3:46 PM

Talabat couriers in Abu Dhabi. The company operates in eight countries across the Mena region

Third-quarter rise of 46%
Plans to list on DFM soon
IPO could raise $1bn

Food delivery company Talabat reported a 46 percent increase in third-quarter profits ahead of its planned IPO.

Delivery Hero, the Berlin-headquartered parent company of the business, said net income reached $98 million in the three months, up from $67 million the previous year.

It said the increased profit was due to improved logistics efficiency, continued growth in service fees, and greater profitability for its grocery and retail business.

Talabat, which operates in eight countries across the Middle East and North Africa, achieved the increased profit on the back of a 23 percent year-on-year increase in gross transactions – a common metric for delivery firms measuring the total value of all goods sold – to $1.92 billion.

The company attributed this to stronger order volumes across all regions. In terms of country mix, the GCC countries contributed 88 percent of total gross transactions.

Delivery Hero reported double-digit growth rates across its business segments. It said its gross merchandise value grew 9 percent, to $13.19 billion.

It announced plans to list on the Dubai Financial Market in the fourth quarter of this year.

It said the listing would be carried out through a secondary sale of shares, with Delivery Hero retaining a majority interest in the company.

Recent media reports suggest that the IPO could take place as early as next week.

Delivery Hero declined to comment on the timing of the IPO when contacted by AGBI.

The listing could value Talabat between $9 billion and $12 billion, Bloomberg estimates, and could raise $1 billion.

Bloomberg reported in September that Emirates NBD Bank, Morgan Stanley and JPMorgan Chase & Co. will work on the IPO.

Talabat’s rival Careem was acquired by Uber for $3.1 billion in 2019. Uber retains ownership of the ride-hailing platform and a 49 percent stake in its delivery business following the acquisition of a 50.03 percent stake for $400 million by e&, formerly known as Etisalat, last year.

Careem has grown to what it calls a “super-app”, offering a range of services from local and global companies, including laundry, home cleaning and car rentals.

Food delivery companies in the Mena region doubled their net profit in 2023 generating $680 million, a 120 percent year on year increase, according to Teaser Research Company.