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Abraaj taps online consumer with first Turkey fund deal

The emerging markets specialist has acquired a minority stake in e-commerce business Hepsiburada

The Abraaj Group has acquired a minority stake in Turkish e-commerce business Hepsiburada, according to a statement from the firm.

Financial details of the transaction were not disclosed, but a market source indicated that the group acquired a 25 percent stake in the business for around $100 million.

Abraaj declined to comment beyond the statement.

It is understood that Abraaj used capital from its new Turkey-focused fund, which is currently in market targeting $500 million. It is unclear how much capital has been collected for this vehicle. Abraaj declined to comment on fundraising.

Abraaj will own the business alongside the Dogan family who are controlling shareholders of the Dogan Group, a Turkish conglomerate active in the media, energy, financial services and tourism sectors.

Established in 1998 and headquartered in Istanbul, Hepsiburada is the most visited online retail site in Turkey, according to Abraaj, with more than 1.5 million unique customers per year and more than 14 million unique monthly visitors, which corresponds to more than a third of Turkey’s total online population.

The business began with a focus on IT hardware, but has since diversified its portfolio, and today offers 500,000 products in more than 30 different categories, including mobile phones and cosmetics. In the last ten years the business has grown its revenues more than 25 fold, with net revenues of TL 1 billion (€357 million; $403 million), Abraaj said.

The group’s investment will be used to implement a “value creation plan” devised with the Hepsiburada management team, which includes relocating to a new, purpose-built fulfilment centre – replacing the company’s existing five warehouse facilities – enhancing the company’s IT infrastructure, launching a third-party marketplace platform and strengthening the company’s mobile offering.

As part of the transaction Abraaj will also invest in Evmanya and Altincicadde, two smaller online subsidiaries of Hepsiburada, capitalising on the growth opportunities in the furniture and home accessories market through four physical stores as well as omni-channel retailing.

This is the emerging markets specialist’s ninth investment in Turkey. Last January the group acquired a majority stake in Turkish dairy producer Yörsan Group, alongside the European Bank for Reconstruction and Development (EBRD) and the founding Yörük family, after a five-year search for a leading Turkish dairy producer, PEI reported at the time.