First Turkish Firm to IPO on Nasdaq Hits $3.9 Billion Value

(Bloomberg) -- Hepsiburada.com was valued at $3.9 billion in its initial public offering on Nasdaq, the first such listing on the exchange by a Turkish firm.

The company, one of Turkey's largest online shopping platforms, sold shares at $12 apiece and is planning to use the proceeds to offer additional services such as booking flights and money transfers, according to Hanzade Dogan Boyner, the founder and chairwoman.

“We are aiming to use the proceeds to expand our services not only in our home market of Turkey but also in nearby and high-potential markets,” she said Thursday in an online media briefing shortly before the company's shares start trading in New York. “There are strong markets in the Middle East, North Africa and eastern Europe.”

Hepsiburada is going public after more than doubling revenue during last year's pandemic lockdowns. Online shopping still accounts for about 10% of the Turkish retail industry, compared with more than 20% in much of Europe, highlighting the potential for growth.

The company, backed by a unit of Franklin Resources Inc. and formally known as D-Market Elektronik Hizmetler ve Ticaret AS, said it sold shares worth $738 million, or 20% of the total shares, in the offering, and will receive a net of $470 million through its rights issue.

The shares closed Thursday in their first day of trading up 12% to $13.43.

The company picked the US over Turkey or Europe to capitalize on the larger investor base and because most of its global peers are listed there, Dogan said in a television interview. Investors were benchmarking the company against other “national / regional e-commerce champions,” including MercadoLibre Inc. in Latin America, South Korea's Coupang Inc. and Ozon Holdings Plc in Russia, she said.

‘Right Opportunity'

“We may consider making acquisitions if the right opportunity comes our way” for inorganic growth, Dogan said, adding there's no immediate plan. “For the first one or two years we will focus on offering new services and growth rather than increasing our market share.”

The founder cut her stake to 21.4% from 25% after the rights issue in the IPO but will continue holding three-quarters of the voting power in the company, according to a prospectus filed to U.S. watchdog Securities and Exchange Commission last month.

Franklin Resources Inc., which is the only share seller in the listing, will see its holding drop to 14.6% from 25%. The remainder is owned by the founder's family members.

Hanzade Dogan Boyner is one of the four daughters of Turkish billionaire Aydin Dogan, founder of Dogan Sirketler Grubu Holding AS.

Turkey's Unicorns

Hepsiburada joins a slew of startups in Turkey whose valuations have exceeded $1 billion. Dream Games, a mobile game developer, rose to unicorn status by securing $155 million Wednesday in its latest funding round.

Peak, a casual game developer acquired by Zynga inc. in 2020, was valued at $1.8 billion while online grocery delivery app Getir reached $7.55 billion in a round last month.

Hepsiburada's top rival Trendyol was valued at $9.4 billion when Alibaba Group Holdings Ltd. increased its stake earlier this year.

Private companies targeting IPOs have been hotly pursued by blank check firms looking for targets after special purpose acquisition companies raised a record $117 billion globally this year, mainly in the U.S.

“We never considered the SPAC route,” Dogan said. “We thought with our size, with our corporate governance, our internal processes, we are ready to list directly without a SPAC.”