Indigo Holdings plc, the Middle East focused Investment Company that provides investors with exposure to early stage businesses, has invested IRR 10,000,000,000 (Ten billion Rial), approximately £200,000, in FMCG, the recently established online retail delivery business of Yaran Daryan, the Iranian convenience store chain.
Indigo has acquired a 15% equity stake in FMCG at a post-money valuation of approximately £1,330,000. Yaran Daryan owns a 60% equity stake in FMCG.
FMCG is a newly established Iranian company, co-founded in 2016 by the well-known Yaran Daryan brand. Yaran Daryan is one of Iran’s long-standing retail businesses with approximately 620 stores across Tehran and is the largest association of corner stores in Iran.
FMCG is the online business arm of the Yaran Daryan convenience stores, and is aiming to become Iran’s first and leading online grocery delivery company. FMCG will start operating in Tehran alone, but aims to expand to other cities over time.
FMCG’s business model will differ to the traditional warehousing model of companies such as Ocado, where its online orders will be automatically routed to the nearest Yaran Daryan store, which will then be collected by the company’s fleet of drivers and delivered to the customer’s address.
Commenting on the latest acquisition, Eddie Kerman, Executive Director of Indigo Holdings, said:
“I am delighted to announce Indigo’s third investment, a 15% stake in Iranian Fast Moving Consumer Goods. It provides an exciting new business opportunity, which focuses exclusively on the online delivery of household goods in Tehran. We are also proud to be partnering with the well-known Yaran Daryan convenience store brand in this venture, and see tremendous growth potential in the online grocery business throughout Iran.
“Additionally, the wealth of data that has been collected and analysed from the Yaran Daryan stores, regarding consumer trends and patterns, has proven invaluable in allowing us to best understand and service consumers through this new online offering.
“With the continued proliferation of 3G and 4G coverage throughout Iran, along with rapidly rising smartphone penetration rates, we are hugely excited by the prospect of enabling consumers to easily purchase every-day items on their phones, tablets and computers, from their nearest Yaran Daryan convenience store and have them delivered straight to their doors.”
Related Party Transaction
Rouzbeh Pirouz and Ramin Rabii own 100% of Turquoise Group Limited, which itself owns 32.13% of the issued share capital of the Company. Rouzbeh Pirouz and Ramin Rabii also own 3.21% and 10.94% of the Company’s issued share capital respectively. Turquoise Group Limited is acquiring a 4% equity stake in Iranian FMCG. Rouzbeh also owns 23% of Iran Industrial Development Investment Company (“IIDIC”), which in itself is acquiring a 21% equity stake in FMCG, in a share capital increase on the same terms as Indigo and Turquoise Group Limited.
Pursuant to the NEX Exchange Rules for Issuers, the transaction constitutes a related party transaction. Accordingly, Hamish Harris, the Independent Non-Executive Director of the Company has opined on the transaction and consulted the Company’s corporate adviser, Peterhouse Corporate Finance Limited, and considers that the terms of the transaction between the Company, Yaran Daryan and FMCG are fair and reasonable insofar as the Company’s shareholders are concerned.
Indigo’s investment in FMCG follows its acquisition last month of a 1.09% stake in Sheypoor, a leading Iranian online classifieds marketplace, as announced on 8 March 2017, and its earlier acquisition of a 5% stake in Carvanro, the Iranian car ride-sharing app, as announced on 21 February 2017. With regards to these two earlier investments, Sheypoor has created a convenient one-stop destination for all Iranians to buy, sell and search for goods and services quickly, easily, and free of charge.
Sheypoor has grown rapidly to become one of Iran’s leading websites and mobile applications and operates a similar business model to that of Russia-based Avito, which was acquired by South African tech giant NASPERS for US$2.7 billion in 2015. Carvanro is a car ride-sharing marketplace aggregator connecting drivers and passengers wishing to share journeys, similar to that of Europe’s BlaBlaCar which was recently valued at $1.3bln.