Here are some fast-growing startups that are garnering investor interest
In recent years, the Middle East and North Africa (MENA) region has emerged as a hotbed of foodtech innovation, driven by a unique combination of challenges and opportunities. From the arid deserts of Saudi Arabia to the bustling cities of the United Arab Emirates, foodtech startups are seizing market opportunities and attracting venture capital interest. This transformation will not only address food security issues in the region, but also pave the way for sustainable and efficient food systems.
In 2023, the global food technology market was valued at $184.3 billion, and Precedence Research predicts it will reach $475.43 billion by 2033, growing at a compound annual growth rate of nearly 10%. According to a report released by the market analysis firm in April 2024, Asia Pacific will account for 33% of the market, while the Middle East and Africa will account for just 4%.
The MENA region faces significant agricultural challenges, including a lack of arable land and water scarcity. These factors have historically made the region highly dependent on food imports.
However, with the rise of food tech, this is beginning to change.
Growth drivers include rising disposable income, consumer demand for healthier and more sustainable food options, and government supportive policies. Mobile-based services are particularly favored by rising smartphone usage. Indeed, the Middle East and North Africa (MENA) region has seen money flow into cloud kitchens (restaurants without dining areas that only accept takeaway or delivery orders). The concept gained popularity during the pandemic and has stuck around since, with companies opting to cut back on service and focus on cooking.
Here are some of the food tech companies in the MENA region that are growing fast and catching the attention of investors.
Grubtech recently partnered with Saudi Arabian food delivery app Jahez and closed a $15 million Series B funding round. Dubai-based Grubtech provides an end-to-end SaaS platform for restaurants and cloud kitchens to streamline operations, delivery, and inventory management. The startup, which has been operating since 2019, has added grocery stores and pharmacies to its network and plans to use the new funding to expand across Saudi Arabia, Europe, and the UK.
Abu Dhabi, United Arab Emirates, is home to food tech startup Source Capital. The company operates the food delivery app Chew, which connects users with kitchens with unique, healthy food concepts. Its well-known brands include Chic Flic, Eggbun, BWL, Laffa and Buwagyu, and the app surpassed 1 million orders earlier this year. The company operates 17 kitchens across Abu Dhabi, Dubai, Sharjah and Riyadh, and hosts 40 virtual food brands.
It will also feature Pure Harvest Smart Farms, a controlled-environment agriculture company whose greenhouses built in the desert use on-site water treatment, instant cooling of fresh produce and sustainable practices to improve food security. Pure Harvest’s U.S. investors include San Mateo-based Franklin Templeton.
In Dubai, Kitopi is expanding its tech-enabled, multi-brand restaurants, both online and offline. The company’s smart kitchen operating system optimizes every aspect of kitchen operations in real time, maximizing efficiency and increasing utilization. The six-year-old company is backed by SoftBank, Los Angeles-based B Riley Financial and Redwood City’s Next Play Capital and has expanded to 200 locations in eight countries.
Founded in Dubai in 2015, KRUSH Brands operates a multi-kitchen foodservice with last-mile delivery services. The company’s business model is powered by a proprietary integrated ordering and operations platform and focuses on healthy, sustainable and locally produced food.
Matbakhi is a foodtech company that operates a hotel-based cloud kitchen model. The company helps hotels transform their underutilized kitchens into revenue-generating spaces while at the same time revamping their culinary offerings with “soulful brands”. These brands are nurtured by local chefs, inspired by local stories, and create innovative F&B concepts that leverage global best practices in virtual brand operations.
Supy also provides cloud solutions to restaurants, helping them analyze data across their operations, gain real-time visibility into performance, identify discrepancies and control spend, including inventory management, sourcing, auto-replenishment and optimization cost-saving strategies.
Riyadh, Saudi Arabia, Foodics offers all-in-one SaaS for restaurant operations and payments. Notable clients in the MENA region include Starbucks, Dunkin’ Donuts and Cinnabon. The company is backed by New York-based Endeavor Catalyst.
Also look at Nana, a Saudi Arabian digital grocery shopping platform that operates a dark store model and offers delivery within 15 minutes. The company’s website boasts that it has delivered over 45 million orders. Last year, Nana became one of the most funded startups in the MENA region, despite sluggish global economic growth forecasts for 2023.
Calo, a Banama, Bahrain-based foodtech startup, is a meal subscription service that offers personalized meal plans for health-conscious customers. The company operates in Saudi Arabia, UAE, Kuwait, Qatar and Bahrain and has served 10 million people since its launch in 2019. The company is backed by San Francisco-based 500 Global.
Other growing companies in this space include Kaykroo, which operates 45 virtual restaurant brands; Kitch, which offers its own smart cloud kitchen solution; and Kitch Park, which offers cloud kitchen spaces for rent. Barakah fights food waste by finding consumers for unsold fresh produce. Riyadh-based NOMU Group streamlines inventory sourcing, procurement, financing, storage, and delivery for hospitality companies. The Cloud offers a turnkey virtual restaurant management solution. iKcon cloud kitchen company was acquired by REEF Technology, helping the company expand its operations in MENA.
MENA Investors
Among the active investors in MENA startups is Shorooq Partners, which has offices across the region and whose investment portfolio includes foodtech as well as fintech, gaming, climate tech and cryptocurrency companies.
In Kuwait, early-stage accelerator Savour Ventures is scouting startups across the food value chain to build a new sustainable food system. Its portfolio includes Foodics, GoodsMart (an Egyptian home shopping app offering a wide range of products and contactless delivery) and Sprouting Journey (a Bahraini company offering healthy food for kids and babies, free of nuts, added sugars and preservatives).
COTU Ventures, an early-stage venture capital firm based in Dubai, has been actively investing in GCC startups. Earlier this year, the firm announced it had raised a new $54 million fund to “empower great companies in MENA with their first check.” While its portfolio is primarily made up of SaaS, fintech and sales, COTU has also invested in Supy, Chatfood, which offers mobile ordering and other solutions for hospitality brands, RoundMenu, a restaurant listing and food ordering app, and Aydi, a developer of a field operating system for farmers.
In the US, a handful of investors are focusing on the MENA region. Tiburon, California-based Partners for Growth (PFG) has listed the Middle East as one of its focus areas. The firm is backing Tabby, a BNPL e-commerce app that promotes financial freedom in how people shop, earn and save. San Francisco-based 500 Global has invested in more than 250 companies in the MENA region. Sequoia Capital is also known for its broad international presence.
Image: Source Capital
