Good afternoon,
A 26-year-old Australian woman moved to Dubai in 2001, with a straightforward plan: work for a year, save enough for a property down payment back home, and then move back to Melbourne.
When her marketing job didn’t work out, she started looking at other opportunities.
During her drives along Sheikh Zayed Road, she noticed something about Dubai’s growing hospitality industry; restaurants and entertainment venues had no compelling way to attract customers and offer value.
This observation led to a simple idea: a book of “buy one get one free” vouchers that would benefit both businesses and consumers.
Businesses would attract new customers, while consumers would enjoy significant discounts on dining and activities.
Starting out in a local internet café, she dove into market research and started reaching out to different businesses. Despite facing many setbacks, her persistence paid off when she landed Marriott as her first major partner.
That is how The Entertainer was born.
During its early days, Donna Benton, who had been in Dubai for less than a year, handled everything herself; from merchant partnerships to stocking discount books.
By 2005, the business had just five employees and was being used by thousands in the UAE and some other markets.
The company received an early investment from an undisclosed investor, but Benton bought out this stake four years later.
She continued growing the business in the UAE and other markets. In 2012, Abraaj acquired 50 percent of The Entertainer. At the time, its discount vouchers were being used by almost half a million people around the world.
Abraaj helped the company expand to more markets and launch mobile apps, creating a digital channel for customers to buy and use the vouchers.
The company eventually transitioned completely into an online platform. In an interview, Donna noted that Abraaj’s investment enabled them to achieve in two years what would have taken eight.
In 2018, Bahrain-based investment bank GFH acquired an 85 percent stake in the company in a $150 million deal, with its founder leaving the business. She sold her remaining 15 percent stake in 2020. When GFH’s plans didn’t materialize as hoped, they brought Donna back to revive the company in 2023.
The Entertainer was one of the first businesses in the region to successfully transform an offline publishing business into an online platform.
But someone had done it before them and they’ve ended up a much larger company; one of the biggest in the region.
Property Finder.
In 2004, Michael Layhani, a Geneva native visited Dubai for the first time to meet extended family.
He was struck by something during this trip, the city was building massive real estate developments including the likes of The Palm Islands.
When he asked around about how these properties would be sold, everyone pointed him to one place: the classifieds section of newspapers. That was where you went whether you wanted to rent an apartment or sell a villa.
The poor user experience of newspaper classifieds made him see a clear gap in the market. With UAE developing numerous mega projects, he believed this gap could turn into a significant opportunity.
In June 2005, Michael moved from Geneva to Dubai to start Al Bab World, the first printed real estate classified magazine in the UAE, aimed at generating leads for property agents. Every two weeks, 70,000 copies of the magazine were distributed for free.
The early days weren’t easy. Al Bab World struggled to compete with Gulf News classifieds, which had locked in advertising clients with exclusivity agreements offering discounts up to 92 percent. The newspaper would call these clients, warning them they’d lose their deals if they advertised with Al Bab World.
Just as the business was heading toward closure, Australia’s REA Group stepped in. It was a real estate advertising group owned by a subsidiary of NewsCorp.
They saw Al Bab World as their entry point into the Middle East market and acquired 51 percent for reportedly $1 million, investing another $2.1 million at a later point. The deal saved the company from bankruptcy.
The same year, the company transitioned into an online business and rebranded as PropertyFinder.ae, becoming the first real estate platform in the UAE, with over 1,000 clients, and thousands of listings each month.
Unlike The Entertainer’s transition, Michael Lahyani always intended to build a digital real estate platform eventually. Its shift online was swift and decisive.
After the 2008 financial crisis, Dubai’s real estate market crashed, with prices falling by as much as 60 percent. REA Group wanted out of Dubai and gave Michael Lahyani an ultimatum: break even by the end of the year or face the consequences.
To achieve profitability, he would have had to cut half the team, something he didn’t think was the right thing to do.
REA no longer believed in Dubai as an opportunity. Michael, however, knew it would rebound.
He and his co-founder, Renan Bourdeau, seized the opportunity and reacquired REA’s stake for a lower price than they had initially invested.
The recession turned out to be a blessing in disguise. Real estate agents suddenly couldn’t afford print advertising, making online platforms the obvious choice. Propertyfinder.ae could provide leads at a lower cost than print. By 2010, the company had broken even.
In 2013, Beco Capital led the company’s Series A. At the time, Property Finder had an annual revenue run rate of about $1.5 million.
The company continued to grow and in 2018 it raised $120 million in one of the largest rounds in the region at the time, led by General Atlantic (its first in the Middle East) at a valuation close to $500 million.
In 2024, almost eleven years after Beco initially invested in the company, it exited as Property Finder repurchased Beco’s entire stake, valuing the business at $1 billion. To complete the transaction, the company raised $90 million in debt, a first-of-its-kind deal in the region.
These are perhaps the only two examples in the region where publishing businesses evolved into online platforms and built successful companies.
The scale of the two is very different though. The Entertainer was acquired in a $150 million deal, while Property Finder recently valued itself at $1 billion.
If we expand the scope to include all types of offline businesses that transitioned to online platforms, there may be a few more. One that comes to mind is Saudi lending platform Tasheel Finance, which was started by an offline retailer eXtra.
In this case, however, the retailer’s core business continues to perform well, with the lending platform serving as an excellent addition built on top of the existing operation, and expected to be spun off into an independent public company soon.
On the other hand, when considering businesses that began online and later developed significant offline operations, Eyewa tops the list. Others include EMPG-owned Zameen in Pakistan and perhaps even Huda Beauty. But that’s a conversation for another day.
That’s it for today.
See you soon,
Zubair