Saudi Arabia-Based Foodtech Startup Foodics Raises US$4 Million Series A Funding
Free Book Preview Money-Smart Solopreneur
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
Foodics, a cloud-based restaurant management system born out of Saudi Arabia, has raised US$4 million in a Series A funding round -the first external raise for the startup- led by KSA-based Raed Ventures and Riyad TAQNIA Fund with participation from Naseel Holding and 500 Startups. The Foodics software manages sales, transactions, inventory, employee schedules, and customer relationships among other F&B operations using iPads as a point of sale (POS) device at restaurants.
The startup, a graduate of the Badir Technology Incubator in Saudi Arabia, was co-founded in 2013 by two KSA-based entrepreneurs, Ahmad Alzaini and Musab Alothmani, who are also friends from university. Foodics aims to use the investment to consolidate its position in the Middle East by “hiring R&D, data science, and AI experts to continue innovating,” while also building a talent pool for customer support divisions. “Part of this round will also be used to expand globally, starting from Europe,” says CEO Alzaini. The entrepreneur admits that the upstart did not even consider external investment for the first three years of operations, focusing only on “delivering a great product and creating a positive customer experience.” “[It is] this mentality that led to an extraordinary growth of our company, which was quickly noticed by investors,” says Alzaini.
According to a press statement, Omar Almajdouie, founding partner, Raed Ventures views Foodics’ success as an indication that the Kingdom’s startups possess the capability to enter any complex technology field that were previously reserved for global companies to enter and disrupt. The sentiment is shared by Alzaini as well, who counts the investors’ trust and shared passion for innovation and customer happiness as key advantages of getting the current set of investors on board their enterprise. At the time of writing, Foodics counts over a team of over 50 employees working from its offices in Riyadh, Jeddah, Khobar and Dubai, and says it’s currently used by over 600 F&B brands in the Middle East- primarily in Saudi Arabia and the UAE.
They serve F&B businesses ranging from food trucks to large franchising chains, and Alzaini believes that a key element of Foodics is that it’s scalable, allowing them to provide a centralized, enterprise-level all-inone solution to clients, be it a small eatery or a multinational chain. The Foodics system, among other things, supports multiple languages, allows for third party systems integration, provides key reports exportable in various formats, and also boasts of a 24x7 customer support. And interestingly, all these utilities work via a handy iPad device, and a quick look at the customer testimonials on the Foodics website gives you an idea of the extent to which the product is simplifying operations management for F&B enterprises.
Foodics’ growth story is also in some ways a lesson for entrepreneurs on successfully pivoting your startup at the right time to kickstart growth. “Our first product was actually quite different; when we started in 2013, our goal was to innovate the restaurant menu market by providing a new digital menu service. After developing the solution we started approaching businesses, and we immediately realized that most of our potential clients required an integration with their POS solution, and that’s where the idea of Foodics as it is today came from,” says Alzaini, explaining the early years of the company.
It was then that the team noticed a substantial gap in POS and restaurant management tech in the region, and decided to tweak their product to build what is now a cloud-based SaaS product. “Without listening to your customers, to the market, the competitors, and without an eye for new technology, there is a very good chance your business will struggle. On the other hand, you also need to know when to defend your ideas, to trust your guts, when you know that a risky business decision you made is going to pay off,” he notes.
However, the entrepreneur admits that a boom in the region’s foodtech space has also brought with it more competition- both from established players doubling up investment in the digital front, and emerging tech upstarts. Personally, he says, the Foodics team focuses on delivering the best customer service, on partnering with top businesses in the sector, and integrating with the right partners to stand out in the crowded market.
“The industry needs vary in an often subtle and fast paced way, therefore you always have to be on the lookout for new trends. Classic-style corporations can’t always keep up with this evolution, and this opens up the market for smaller startups that are capable of rapid development,” he adds. And to Foodics’ credit, the startup sure seems to keep up with the tech evolution in their field. For the future, the company is planning to “invest heavily in AI-powered business intelligence” to enable better data-oriented decision making for users. Further, the startup also has an eye on expanding the integration capabilities of their product to help create synergies with other accounting tools and CRMs used by client entities.
Ahmed Alzaini, CEO, Foodics
Given your fundraising experience, what, according to you, are the top three elements that investors in the MENA region look for in a startup that they are considering to fund?
1. Growth “One of the most valued elements is definitely exponential growth. If you can achieve exponential growth year over year, you will definitely attract not only investment, but also great talent and partners.”
2. Market “Growth is definitely a key factor, but choosing a market with a good potential is also extremely important, and highly valued by investors, as it strongly affects the company potential outreach and development.”
3. Team and talent “I will never stress this enough; your company’s success is entirely determined by the talent that you manage to attract. No market changes or adverse situations can bother you, as long as you have a team of rock stars, capable of overcoming difficult challenges. Investors know this and highly value startups with a team of competent and committed people.”