ABRAAJ Capital acquires stake in Maktoob.com

The acquisition was made through the $116 million Abraaj Buyout Fund, which is now fully invested.

Commenting on the deal, Humayun Shahryar, Executive Director of Abraaj Capital, said: "Maktoob.com is a visionary web community: a portal to a dedicated and comprehensive Arabic online service that is already widely successful, and with the collective input of the management and the new board, will be able to realise its goal of becoming the leading online community and e-commerce portal of the Arab world."

The rising popularity of Maktoob among Arabic speakers comes on the backdrop of some solid growth in the numbers of Internet users across the Arab League member states. According to Madar Research, the total number of Internet users among the 22 Arab countries rose five fold between 2000 and 2005 to around 17 million. The average penetration, however, still remains low at between seven and eight percent and varies between the high 20s in some of the Gulf countries and less than one per cent in a number of Arab African states.

Shahryar said that the region's rapid growth of Internet combined with its fast expanding young population and rising per capita income provides the right context for Abraaj's capital injection into the company, which gives Maktoob the resources to further enhance its market share. "Maktoob's post-acquisition strategy is focused on consolidating its position as the biggest online portal and e-commerce provider in the Arab world," he added.

Samih Toukan, Chief Executive Officer of Maktoob.com, said that the web portal will continue to build its core customer base, expand its team and grow by acquiring and merging with other players in the region. Maktoob has already acquired three companies since the beginning of 2005 and now with additional funding available will be aggressively looking for players that could help to increase traffic and revenue for the web portal or add new technologies and products, he added.

"We are delighted that Abraaj Capital, the region's premier private equity house, shares our vision and ambition for Maktoob.com. We are already the Arab world's most popular web community, with almost four million registered users. With the injection of expertise, experience and investment provided by Abraaj Capital, we hope to accelerate our growth plans and take our rightful place as the Arab world's leading online partner."

Maktoob.com has undertaken many recent initiatives, including online auction (souq.com) and CashU.com, a prepaid online payments card. The online portal is also in the business of developing e-commerce capabilities for its clients. Maktoob also provides e-mail, chat rooms and information and entertainment portal services.

"Maktoob offers a powerful Arabic email technology that does not require the support of an Arabic operating system. It owns its proprietary online auction software and has a user base of 3.9 million community members growing at 3,000 members every day. Its 30,000 CashU account holders, 60 million page views per month and 1.6 million unique visitors every month, already makes it an excellent company. We see Maktoob growing as large as some of the big online providers in the developed economies of the West in the next few years," Toukan continued.