Saudi Arabia-based foodtech startup Foodics announced today that it has secured $4 million in Series A funding, led by Riyad TAQNIA Fund and Wadi Makkah Ventures. This round of funding marks the largest early stage investment ever received by a food tech startup in the region.
The new capital will further expand the company’s regional presence, improve its technology platform, and develop new products.
Overview of Foodics
Foodics is a Saudi Arabia-based restaurant management solution that enables restaurants, cafes and other food service providers to use one comprehensive platform for managing all aspects of their operations. It provides tools for monitoring financials, order tracking, labor cost control, inventory management, etc. Foodics was founded in 2015 and is used by over 5,000 customers across 3 countries.
In June 2020 Foodics announced that it had received $4 million in Series A financing from STV. In addition, invest Knowledge and TAQNIA Funds — two Middle Eastern investment firms — participated in the funding round. This new influx of capital is being used to expand its team and accelerate product development efforts while broadening its market reach. With these resources, Foodics aims to transform how restaurants manage their day-to-day operations.
Overview of Series A funding
Series A funding is one of the most important stages in a startup’s growth, as it is when a startup raises capital from external investors to expand their operations. The funds raised help the startup execute their vision and establish infrastructure, such as opening new offices, hiring staff and acquiring technology. This financing round typically follows an earlier investment round of seed or angel funding.
Series A investments are typically raised in exchange for equity in the company and can range anywhere from $2 million to $20 million. Investors will use metrics like the total addressable market (TAM), customer lifetime value (CLV) and customer acquisition cost (CAC) to determine their valuation of the company before investing.
When it comes time for startups to raise their Series A round, they’ll have typically gone through extensive due diligence with potential investors, who will have evaluated past deliverables and current projections for future performance. However, fundraising doesn’t end with Series A – startups will need additional financing rounds during their growth journey; subsequent funding rounds are called Series B through Series E (and beyond).
Saudi Arabia-Based Foodtech Startup Foodics Raises US$4 Million Series A Funding
Foodics, a Saudi Arabia-based food tech startup, has recently announced the completion of its Series A funding round, raising US$4 million from several investors.
The funding will accelerate the company’s growth and expand its operations in the Middle East and North Africa region.
Read on to know more about the details of the funding round.
Investors involved
Foodics, a Riyadh-based omnichannel platform providing cloud-based point of sale (POS) systems and back office management has secured $4 million in Series A funding from a group of high profile investors including Saudi Technology Ventures (STV), 500 Startups, Wabel, Endure Capital and the Saudi Angels Network.
The funding will advance the company’s mission to deliver improved customer experience, seamless operational capabilities, and enhance its value proposition for large corporate customers. In addition, it will help Foodics enter new markets and scale its operations across the GCC countries.
STV led the deal with participation from 500 Startups, Wabel, Endure Capital, Saudi Angels Network, and other investors. STV is a US$500 million investment arm of Saudi Arabia’s Public Investment Fund (PIF), embracing groundbreaking technologies such as artificial intelligence and the internet of things that have never been done before in industries such as healthcare and financial services. The fund focuses on companies that are driving innovation through technology worldwide, emphasising emerging markets like MENA, SEA South Asia and Latin America.
Endure Capital is a venture capital firm investing in early stage consumer SaaS startups with presence in the Gulf Region, US & Europe. At the same time, Saudi Angels Network is a leading angel investor network in the MENA region. Founded by seasoned entrepreneurs who have gone through this journey many times with previous startups across different continents & verticals.
Use of funds
Foodics, a Saudi Arabia-based cloud-based POS and restaurant management system, raised $4 million in Series A funding. The round was led by NCB Capital, with participation from co-investors Raed Ventures and Global Ventures.
The investment will be used to further expand Foodics’ grasp in the Middle East’s restaurant market, capitalising on its current success there to accelerate the company’s geographic coverage over multiple countries in the region. Additionally, Foodics plans to use part of the funds to significantly grow its engineering and product marketing teams, treading further into software development with a special focus on data sciences and machine learning capabilities. The company also plans to invest more resources into building its regional partnership network with businesses seeking referral services from Foodics’ solution suite.
Impact of Funding
Recently, Saudi Arabia-based Foodtech startup Foodics has raised US$4 million in a Series A funding round. This investment marks the latest milestone for the startup, which has been making waves in the food tech industry.
This funding will greatly impact the future of the company. So let’s take a closer look at how the funding will help Foodics achieve its long term goals.
Expansion plans
Following Foodics’ $4 million Series A funding, the startup is looking to build upon its existing technological capabilities, focusing on enhancing its customer experience, expanding geographically, and leveraging its resources to become the leading store management platform in the MENA region.
Investments will be allocated towards product development, customer acquisition and operations. Specifically, Foodics plans to double down on research and development to further improve data quality and the robustness of their platform’s analytics. Additionally, the company aims to increase customer self-service options and launch new verticals such as CloudPOS, Logistics Automation etcetera.
Geographical expansion is a top priority for Foodics, with expansion plans for Lebanon by mid-2020 followed by Kuwait, Bahrain and Saudi Arabia within 2021. Finally, investments are expected to strengthen marketing activities across various channels such as SEO campaigns and influencer collaborations that will ensure maximum visibility of the platforms’ features amongst all sectors in retail.
New product development
The increased funding that Foodics has recently achieved allows the company to make advancements and improvements to their products and services. An influx of funds will be used to further invest in new product development, as well as in core research and data analytics. In addition, the new cash injection provides much-needed resources for further growth, allowing Foodics’ existing technology solutions to be tailored to fit the market’s needs more effectively.
Among the various options for capital utilisation, an effective route for investing these newly available funds is product development. This includes researching customer preferences, understanding target markets better, increasing tech expertise and exploring innovative ways to plan product roadmaps. New product development also involves enhancing popular features or launching new ones based on customer feedback. An increase in funding can also provide resources for structural updates including changes needed in UI/UX design of products.
In short, with an influx of capital such as this recent investment, Foodics can invest heavily into research & development efforts that improve their offerings and attain more customer satisfaction.
Saudi Arabia’s Growing Foodtech Scene
Saudi Arabia-based foodtech startup, Foodics, recently raised US$4 million in its Series A funding, emphasising the potential growth of the foodtech scene in the country. Foodics’ success shows that Saudi Arabia is becoming an attractive destination for investors and entrepreneurs in this rapidly growing sector.
Furthermore, the availability of talent, resources, and funds makes it a great place to launch innovative foodtech solutions. Let’s look further into the trends of Saudi Arabia’s foodtech scene.
Overview of the foodtech scene
Saudi Arabia’s food industry is a major sector, with an estimated market size of $107.8 billion in 2018 and a forecasted CAGR of 4.2 percent over 2019-2024. In 2020, Saudi Arabian e-commerce reached unprecedented levels amidst the COVID-19 pandemic and the rise of technology fueled the growth of the food delivery industry.
2020 and 2021 have seen increased investments in Saudi foodtech startups, such as Foodics Limited’s $4 million raise at a valuation mark of $32 million from Riyad TAQNIA Fund, Wamda Capital, Global Ventures and other regional investors that also participated earlier in its seed round. Another promising player, YFood raised about $3 million by FMD Venture and Anova Investment Partner; which led to hitting milestones such as 60 percent market share growth over one year through strategic expansions within the Kingdom’s key metropolitan cities.
More investors are getting onboard with increasing ventures including Trukker & Hunger Station (a German joint venture) that secured more than $15million compared to 2019; noting impressive performances by established players such as Hunger Station (+400%), Taster (+500%) and others during Q1 2021 versus 2020 respectively. Various F&B brands seem to have jumped on board this trend as they reaped rewards by going online. It is important to note that mergers & acquisitions will be a trend this year with Mazzat acquiring hungerStation towards being a super app for delivery operations within the MENA region amongst other activities for consolidation purposes.
Other notable foodtech startups
Saudi Arabia’s food & drink tech ecosystem is growing with several prominent companies emerging at the forefront of innovation and driving progress in the country. For example, Foodics, a restaurant management software, has recently secured a $4 million series A funding round, making them one of the most successful food startups in the region.
Besides Foodics, other notable foodtech companies are emerging in Saudi Arabia such as Brixly Labs, which develops digital-payment solutions; Barakat Quality Plus (BQP), which provides fresh fruit and vegetable delivery services; and Kitopi, a cloud-based commercial kitchen infrastructure provider.
These companies have made strides in the Saudi Arabian market through proactive efforts to provide modern technology solutions to traditional problems posed by multiple stakeholders within the restaurant industry. In addition to these industry players, local Chinese investors have also contributed significantly to this sector’s growth. These investments highlight China’s intent on advancing technological innovation in Saudi Arabia’s industries and helping entrepreneurs tackle hard problems with existing resources.
Overall, there has been significant growth in Saudi Arabia’s foodtech landscape over recent years despite initial scepticism from conservative segments of society about how this new wave of tech would disrupt traditional business practices. As a result, restaurant owners are opening up to technologies that enable them to better manage their operations and offer additional features for customers – such as mobile ordering – allowing for higher levels of convenience and satisfaction.