Iran's national mobile service provider buys into local "Amazon"
Summary
Irans largest telecommunications provider, MCI (Mobile Communications of Iran), has acquired a 40% stake in the countrys leading e-commerce platform, Digikala, through its venture capital arm, "Harakat Aval".Digikala, often referred to as Irans version of Amazon, is a prominent Iranian e-commerce company that operates as an online marketplace, offering a wide range of products, including electronics, home goods, fashion, and beauty products. With this landmark deal, Digikala is positioned to address several challenges, including its plan to list on the stock exchange and expand into global markets.The acquisition by MCI is expected to intensify competition among major players in the Iranian tech sector, notably between Digikala and ride-hailing apps such as Snapp and Tapsi. As the details of this substantial agreement continue to emerge, further developments are anticipated in the coming days.Discussions regarding this stake began in January 2024, but sources reveal that preliminary talks commenced over two years ago.The deal, reported by Digiato, values Digikala at IRR 300 trillion ($500mn), with MCIs 40% share amounting to IRR 120 trillion. Despite the substantial acquisition, the founders, Hamid and Saeed Mohammadi, will retain a 22% stake and hold two out of five seats on Digikalas board.Digikalas announcement indicated that the founders previously held 32.36% of the company, suggesting that MCI has also acquired a portion of the Mohammadi brothers shares.As part of the agreement, no single shareholder will have exclusive control over the company. This exit is one of Saravas most successful, following recent profitable divestments from other notable ventures including Alibaba, AloPeyk, and Navar.