Hepsiburada Turkey’s Second-largest E-Commerce Firm Files for US IPO

UTC by Godfrey Benjamin · 3 min read
Hepsiburada Turkey’s Second-largest E-Commerce Firm Files for US IPO
Photo: Depositphotos

Per the filed prospectus, Hepsiburada saw an upsurge in its revenue which grew to 6.4 billion liras ($750 million) in 2020 from 2.6 billion liras in 2019.

The second-largest e-commerce marketplace, Hepsiburada has filed to go public in the United States through an Initial Public Offering (IPO) route. According to the details from the prospectus filed with the US Securities and Exchange Commission (SEC), the company has a total share of 40,000,000, however, it did not specify how many it will be giving out in the IPO.

The IPO plans for Hepsiburada, formerly known as D-Market Elektronik Hizmetler ve Ticaret AS came following the uptick in sales stirred by the COVID-19 pandemic as people doubled their spendings on household necessities. The company has positioned itself as one of the marketplaces of choice due to its wide range of offerings.

“Hepsiburada” means “You can find anything you want here,” founder and company Chairwoman Hanzade Doğan wrote in the SEC filing. With a market share of about 17% per data from Arthur D Little Inc, the company revealed it occupies the second position amongst its competitors.

“I founded Hepsiburada with the vision to build the gateway for digitalization of commerce in Turkey, from shopping to payments to last-mile delivery,” Doğan wrote. “Throughout our 20-year history, we have scaled Hepsiburada with the conviction that digitalization would improve commerce by connecting every household and every merchant in Turkey. And by offering the broadest range of goods to our customers while setting the standard for affordability, accessibility, and convenience.”

Besides the unique diversity of its offerings, the company says it “offers next-day delivery to every corner of Turkey and make all goods and services accessible by every customer. With our long-tail selection and extended catalog of over 44 million SKUs, our customers can find everything they need at their fingertips.”

eCommerce continues to be one of the most favored industries to benefit from the economy reopening and the attractiveness of US markets remains a strong force for the Hepsiburada IPO.

Performance Figures that Prompted the Hepsiburada IPO

Per the filed prospectus, the company saw an upsurge in its revenue which grew to 6.4 billion liras ($750 million) in 2020 from 2.6 billion liras a year ago. Hepsiburada, however, reported a total loss of 476 million liras last year, up from 133 million liras in 2019. Explaining the negative trend, Doğan said,

“We experienced negative Free Cash Flow in the three months ended March 31, 2021, due to purchases of inventories higher than usual, to be able to secure supply during the COVID-19 lockdown period in the second quarter of 2021.”

Other highlights of the company include an uptick in the gross merchandise value, a measure of the total value of products and orders through the firm’s online marketplace. This value grew to 17 billion liras from 9 million customers in 2020 from 8 billion liras from 6.5 million users a year ago.

The company did not specify the date the shares will be giving out, however, it plans to list on the tech-heavy Nasdaq exchange. The underwriters listed for the Hepsiburada IPO include: Morgan Stanley (NYSE: MS), JPMorgan Chase & Co (NYSE: JPM), Bank of America Securities, UBS Group AG (SWX: UBSG), and Goldman Sachs Group Inc (NYSE: GS).

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