Zapp, a British delivery startup, plans to launch in Dubai this year, entering the increasingly crowded Middle East market, reported by Bloomberg. “We are always looking for opportunities to grow our business and are considering launching in the region this year,” a Zapp spokesperson said in a statement to Bloomberg. The company declined to provide further details.
Zapp was among the startups founded during the pandemic that aimed to deliver groceries and other goods in under 15 minutes. After investors poured money into the sector, valuations fell as people returned to offices and rising inflation held down delivery costs.
Zapp: Talabat partnership
Zapp told investors it was making a comeback, in part because of a focus on higher-priced goods. The company is on track to generate more than $100 million in sales in the U.K. by 2024 after signing partnerships with higher-end brands such as LVMH and Fortnum & Mason Plc, according to documents seen by Bloomberg. The documents, filed with Zapp’s board, show the startup’s operating margin is more than 15%, with an average delivery order of more than $50.
In the U.K., the only country where Zapp operates, the startup partners with other delivery providers such as Deliveroo Plc and Uber Eats to share orders. Zapp has hired people in Dubai and is in talks to partner with regional delivery companies Talabat Holding Plc and Careem, according to a person familiar with Zapp’s operations, who spoke on condition of anonymity because the talks are private. Zapp declined to comment. Representatives for Talabat and Careem did not respond to requests for comment.
Zapp’s expansion into the United Arab Emirates
Zapp’s expansion into the Middle East comes amid growing competition for delivery apps in the region. Keeta, an app from Chinese company Meituan, recently launched in Saudi Arabia and has expanded thanks to sharp price cuts. Last year, Delivery Hero’s Talabat debuted in Dubai as the largest initial public offering in the Gulf.
According to research firm Statista, online delivery revenue in the Gulf Cooperation Council, which includes Saudi Arabia and the United Arab Emirates, will reach $18.9 billion by 2025, growing 6.1% annually over the next four years. “The food delivery market in the Gulf region remains largely underserved compared to Western countries, presenting a significant growth opportunity,” said Tatyana Lisitsyna, an analyst at Bloomberg Intelligence.