With Yalla and Yalla Ludo among its range of fun and useful digital products, Yalla is rapidly taking over smartphone leisure and gaming in the MENA region. We caught up with Mr. Saifi Ismail, President of Yalla Group, to find out more about this blossoming company, where they’re headed, and what opportunities they offer to investors.
How did the Yalla Group start, and what was the company’s mission in the beginning?
Yalla was founded in 2016, launching its first application, Yalla, in the same year. In 2018, we launched our second flagship application, Yalla Ludo. Both products have shown our team’s close attentiveness to Arabic social tradition and are tailored to serve local users’ preferences and needs. In 2019 and 2020, both products achieved substantial success across MENA, and subsequently, in September 2020, Yalla was successfully listed on the NYSE. Our headquarter is based in Dubai, and by the end of 2021, Yalla Group has over 600 employees globally. Our vision is to build the most popular destination for online social networking and entertainment activities in MENA within the next ten years.
Could you give an overview of each of your products and their functionality, including when they were released?
We have two flagship mobile applications, Yalla, a voice-centric group chat platform launched in 2016, and Yalla Ludo, a casual gaming application with strong social networking features, launched in 2018 featuring online versions of board games, popular in MENA, with in-game voice chat and localized Majlis functionality.
Building on the success of Yalla and Yalla Ludo, we have expanded our offerings, creating a regionally-focused, integrated ecosystem dedicated to fulfilling MENA users’ evolving online social networking and entertainment needs. The ecosystem includes YallaChat, an IM product tailored to the needs of Arabic users; Waha, the first metaverse social app designed for Arabic users specifically. In addition, the ecosystem includes more causal games such as Yalla Baloot and 101 Okey Yalla, both launched in 2021 and developed to sustain vibrant local gaming communities in the region. We are also actively exploring outside of MENA, having launched Yalla Parchis in 2021, a Ludo game app designed for the South American markets. In addition, we established our holding subsidiary, Yalla Game Limited, expanding our capabilities in mid-core and hard-core game distribution in the MENA region, leveraging our local expertise to bring exciting new content to our users.
What makes your apps unique compared with others within the same genre?
We are dedicated to providing Arabic users customized products tailored to local culture, traditions and preferences. We strive to refine our products to perfection and deliver best-in-class experiences to our users. The market’s response is testimony to our efforts, and after six years of development, we have grown into the leading position in MENA.
For Yalla: it ranked top in terms of revenue among the voice-centric social networking and entertainment platform in MENA. It is also the most downloaded audio chat platform worldwide.
For Yalla Ludo: Yalla Ludo ranked No.1 in terms of revenues in tabletop APP category across iOS and Google Play in MENA region, and it is the most revenues generated board game across iOS and Google Play worldwide.
Yalla is a purely UGC platform; all the contents on our apps are generated by our users. Different from many other entertainment platforms, Yalla does not hire professional content generators, but focuses on preserving the equal status of every user in our community. Yalla is unique as we protect our users’ pure social experiences in our platform and encourage our users to freely express their feelings and ideas with each other, always putting our users’ experience as our top priority.
What are the unique features of the Arabian market in particular that you have incorporated within your app development?
The MENA region has a rich culture of social gatherings, coming together to chat, share and entertain. We are trying to replicate MENA people’s offline social activities, bringing their offline social activities online. For example, our flagship application, “Yalla,” brings our Arabic social event Majlis online, where people can group chat and buy virtual gifts, sharing them with friends.
Besides, in our recently launched YallaChat version 1.1, we rolled out the Athan Feature, a unique innovation tailored to Arabic users’ traditions and customs. Since praying plays a significant role in Arabic users’ daily lives, we created the Athan feature to enable users to receive reminders for daily prayers. We believe instant message products are an integral, intimate part of users’ daily lives. Thus, we believe targeted hyper-localization of an IM product is a necessity.
Regarding market demand, the MENA region comprises some of the world’s most affluent countries in terms of GDP per capita, including the UAE, Saudi Arabia, and Kuwait. Online social networking and entertainment users keep increasing, with a young median age below 30, who generally prefer a balanced lifestyle. Moreover, mobile internet penetration keeps steadily rising, most residents are already online for social networking and entertainment. Therefore, the Arabic-speaking countries are a receptive market.
Surprisingly, despite the strong demand, relatively few platforms specifically target MENA’s Arabic market. International platforms have not effectively localized their features and interfaces to the Arabic culture, and there are few home-grown platforms.
We firmly believe that the MENA market is currently at an inflection point, with massive growth potential to be unlocked, and Yalla team is dedicated to serving MENA users, and bringing them a truly customized experience.
Are there any kinds of technology you are currently looking at that you can talk about?
As we all know, the metaverse is seen as the next significant evolution of the internet. Therefore, our team has been researching multiple social networking opportunities to provide our users with extensive socio-digital experiences and the highest level of freedom. We, fortunately, have an R&D team dedicated to this new dimension and launched “Waha” in March 2022. “Waha” is a social networking mobile app that includes the first-ever social metaverse, specifically designed for the MENA region, with industry-leading voice chat capabilities.
In the second quarter of 2022, our team upgraded Waha’s product system and foundation to better prepare it for future opportunities, including merging with new technologies related to the metaverse, enabling more user-generated content, and supporting a larger user community. We will continue to build our capabilities and position ourselves to capture the metaverse’s boundless future possibilities.
Yalla also has established its Strategy Department, which continues to research all internet related verticals to monitor emerging opportunities in the region.
Can you tell us more about your investor relations?
As the first UAE-based technology unicorn listed on the US stock market, Yalla attaches great importance to the compliance of information disclosure, has a dedicated investor relations department, and actively provides investors with timely and accurate company information. After the IPO, an increasing number of well-known international investment institutions started investing in us. We have also maintained good relationships with sell-side analysts from around the world.
We highly value the transparency of corporate management and the opportunity to communicate directly with investors. You can see from our IR website that we have participated in 23 roadshows and conferences organized by global investment banks, including Morgan Stanley and Credit Suisse, in 2021. We have also hosted the Analyst Day in Dubai, and invited a number of industry experts from the MENA region to share their experiences and insights with global investors from the US, China and Europe, to help them better learn about MENA’s business environment as well as the development of the digital economy and the local regulation.
Why should a potential investor be looking at investing in your company?
As a leading Internet company in the Middle East, Yalla is a very worthy investment target for investors to consider. Yalla has strong business fundamentals and strengthening financials. In the past 6 years since our establishment, we have grown rapidly. Our revenues increased by 112.6% in 2019 to US$134.9 million in 2020 and further increased by 102.4% to US$273.1 million in 2021. Unlike many other internet companies facing profitability challenges, Yalla has an excellent business model and has achieved profitability at a very early stage. In 2021, our net profit margin remained at an excellent level of 45%.
Additionally, Yalla is deeply involved in the Middle East market, focusing on providing culturally-tailored services for users in the Middle East throughout the last 6 years. Yalla continues to build its diverse product ecosystem as in addition to our two flagship products, our current product matrix involves instant messaging, metaverse concept social networking, and mid-core and hard-core game distribution.
We believe that Yalla has captured the Middle East market, a market with unique culture and needs and has huge potential. Our professional local team and solid fundamentals demonstrate that Yalla is a unique and promising growth stock. For investors who want to participate in the development of the Middle East market or emerging markets, Yalla is an unmissable target.