Dutch fund buyout deal values Kenyan website at Sh220m

A restaurant setting: Kenyan firm, EatOut, makes money when hotels pay to list on its website. Photo/FILE

By WANGUI MAINA

IN SUMMARY
The buyout of a further 7.9 per cent stake at a cost of Sh17 million ($200,000) will see Africa Media Venture (AMVF) raise its ownership in the Kenyan firm from 25 per cent to 32.9 per cent.
EatOut is the brainchild of owner and chief executive, Mikhul Shah, a Kenyan, who remains the majority shareholder.

EatOut makes money by charging restaurants a listing fee.

A Dutch-based venture capital firm has raised its stake in a Kenyan restaurant guide website, EatOut, in a transaction that values the online portal at Sh220 million.

The buyout of a further 7.9 per cent stake at a cost of Sh17 million ($200,000) will see Africa Media Venture (AMVF) raise its ownership in the Kenyan firm from 25 per cent to 32.9 per cent.

READ: Dutch fund acquires 25pc of Eat Out

EatOut is the brainchild of owner and chief executive, Mikhul Shah, a Kenyan, who remains the majority shareholder.

The guide is now focused on rolling out its business model to more African countries.

“The plan is to explore several new revenue models in Kenya and at the same time gain market share in at least five to ten countries in Africa,” said Mr Shah in an e-mail interview.

AMVF bought a quarter of EatOut’s shares last year.

The announcement of the sale comes at a time EatOut has partnered with Hellofood.com, a leading online food ordering platform with a presence in 30 countries, including Kenya.

The website allows users to order food from any restaurants in their city, for delivery in about 45 minutes. The two businesses are expected to complement each other by giving EatOut users a platform to order food from listed restaurants.

“We’re extremely excited about this partnership, which we hope will dramatically improve convenience and variety for foodies in Nairobi and beyond. Online food delivery is expected to grow quickly and Hellofood are perfectly positioned to make a big impact in the market,” said Mr Shah.

In May, Mr Shah sold an undisclosed stake of SleepOut, an online accommodation guide that he founded 18 months ago, to AMVF for $200,000 (Sh17 million).

He spent part of the money on relaunching the website and financing expansion.

Mr Shah, who grew up in Mombasa, got the idea to start the business upon his return from the UK where he had used similar websites including Urbanspoon and Toptable restaurant guides. He registered a company, Websimba Limited, and rolled out the website.

EatOut makes money by charging restaurants a listing fee.

This saw the business turn a profit from the onset with minimal capital required to set up the website.