UAE listings to get more diverse with tech startup's IPO on the cards

28/04/2025 02:43 AST

The UAE's vibrant initial public offering (IPO) market is poised to welcome a new player, as Cafu, a leading fuel delivery app, reportedly explores a stake sale that could mark its debut on the UAE's stock exchanges.

According to Bloomberg, the startup, founded in 2018 by Emirati tech entrepreneur Rashid Al Ghurair, is in early discussions with Lazard Ltd. to facilitate the potential IPO. While no final decisions have been confirmed, the move underscores the UAE's growing appeal as a hub for diverse, tech-driven listings.

Cafu's prospective IPO would add a digital tech dimension to the UAE's IPO landscape, which has traditionally been dominated by energy, real estate, and retail giants.

Vijay Valecha, chief investment officer at Century Financial, noted, "Cafu's market debut would diversify the UAE's IPO portfolio, showcasing the region's evolving startup ecosystem." Since its inception, Cafu has set a benchmark for integrating traditional services into the digital space, inspiring new entrants in the Gulf's tech sector.

Cafu had disrupted the fuel delivery market by offering petrol and diesel at pump-equivalent prices, with no markup. Initially launched with a modest delivery fee (ranging from Dh10 to Dh20), the company waived these charges during the pandemic to support customers. However, a recent circular announced the reintroduction of tiered delivery fees: Dh20 for priority delivery (within 20 minutes), Dh16 for standard delivery (30 minutes to two hours), and Dh12 for overnight orders (midnight to 6 a.m.). These changes reflect Cafu's efforts to balance profitability with customer affordability.

Beyond fuel delivery, Cafu has expanded into mobile car washes, battery replacements, tyre changes, engine oil services, emergency rescues, and electric vehicle recharging. The company also caters to maritime clients, delivering fuel to boats and watercraft at select Dubai marinas. Its international footprint includes operations in Canada, signaling ambitions beyond the Gulf. Additional revenue streams come from third-party advertising and loyalty programs integrated into the app, further strengthening its financial model.

For Lazard, which recently established a UAE office, advising Cafu's potential IPO could cement its foothold in a region where competitors like Rothschild have long held sway. A successful transaction would highlight Lazard's growing influence in the Gulf's competitive advisory market.

The UAE's IPO market has seen a remarkable surge in recent years, driven by the country's economic diversification and robust investor appetite. In 2024, the Gulf region recorded its highest IPO volumes ever, with 53 listings raising $13.2 billion, according to a PwC report. The UAE alone accounted for 47 per cent of the region's proceeds, with seven IPOs, including Talabat Holding, Lulu Group, and NMDC Energy, generating $6.2 billion.

This year, banking sources project up to eight UAE IPOs, potentially raising $10 billion, with companies like Etihad, Dubizzle, and Noon.com in the pipeline. The first IPO of 2025, Alpha Data, has already set a strong tone.

Cafu's potential listing aligns with the UAE's broader economic strategy to foster innovation and reduce reliance on oil. The Arab world's second-largest economy has attracted global investors with its business-friendly policies and dynamic capital markets. The Dubai Financial Market and Abu Dhabi Securities Exchange have become magnets for companies seeking to tap into the region's liquidity and growth potential. While details of Cafu's IPO-such as the stake size, valuation, and timeline-remain undisclosed, its entry into the public market could inspire other tech startups to follow suit.

Khaleej Times