Riyadh-Based Foodics Raises US$20 Million In Series B Funding Round In Bid To Help F&B Outlets Function Better Using Cloud Technology
This latest round of funding has entailed a total of $28 million raised by Foodics in recent months- a move that is expected to help the firm inch closer towards its goal of becoming the next Saudi unicorn.
Foodics, an F&B tech startup that provides a cloud-based point-of-sale and retail management platform for outlets across the MENA region, has raised US$20 million in a Series B funding round led by Sanabil Investments, a firm wholly owned by Saudi Arabia’s Public Investments Fund (PIF). The round, which was co-led by Riyadh-based venture capital fund STV, also included investments from Endeavor Catalyst, Elm, and Derayah.
Launched in 2014, the Saudi-headquartered startup provides a 360-degree software as a service (SaaS) ecosystem in its mission to ease and enrich operations for restaurant and retail owners using cloud technology. It provides services such as managing stocks, organizing staff schedules, increasing table turnaround time and generating intelligence reports, among others.
This latest round of funding has entailed a total of $28 million raised by Foodics in recent months- a move that is expected to help the firm inch closer towards its goal of becoming the next Saudi unicorn, says co-founder and CEO, Ahmad Al Zaini. “Till date, we have successfully processed over five billion orders through the platform, and over 50,000 terminals while catering to over 10,000 F&B brands,” he explains. “Our software is available in English, Arabic, and French, which makes it one of the most promising SaaS companies in the MENA region.”
In a statement post about the funding round, Ahmad AlNaimi, Partner at STV, said, “The company is strategically positioned to become critical infrastructure for SMEs and a de facto platform to connect digital players with offline retailers.” With five main offices across Saudi Arabia, United Arab Emirates, Jordan and Egypt, Foodics caters to different segments within the F&B sector, including traditional dine-in restaurants, fast food outlets, bakeries, food trucks and cloud kitchens, in addition to the retail sector.
But Al Zaini remains wary that to move towards unicorn status requires the firm to expand its fintech offerings as well. “In order to offer a true one stop platform for owners to manage their business, a finance offering was always part of our vision,” explains the co-founder. Interestingly, the startup was very recently recognized as a fintech company by the Saudi Central Bank (SAMA), which is the he central bank of the Kingdom of Saudi Arabia. With the fresh round of funding and the acknowledgment by SAMA, the startup aims to fast-track its fintech product development for the F&B retail sector.
Ahmad Al Zaini, co-founder and CEO, Foodics. Source: Foodics
Unsurprisingly, however, Foodics also had to bear the brunt of the negative ripple effect felt by the F&B industry during the peak of the global coronavirus crisis last year. But by smartly pivoting some of its offerings, in the form of Foodics Pay (a contactless payment platform), Foodics Now (an online ordering platform for restaurateurs), and Foodics Capital (an SME lending facility), the team was able to adapt to the new situation.
“With cash flow being at a critical pain point for small business owners during the pandemic, we wanted to be able to offer them a one stop shop that also covers their finance needs and enables them to accelerate their growth rate,” explains Al Zaini. “We speeded up the introduction of Foodics Pay, which allows contactless payments. We were able to reach five million transactions through Foodics Pay over the past five months.”
With businesses across the globe shifting to cashless payments, this move stood Foodics in good stead through the crisis, especially as it looked to expand its fintech offerings too. “In 2020, fintech startups were able to fill the gap with solutions that required minimal human contact, thus complying with social distancing regulations while maintaining, or even increasing, the convenience level for their customers,” Al Zaini observes.
But this speedy move towards digitization wasn’t only in the financial sector though. In the wake of the COVID-19 crisis, the F&B sector also experienced huge changes in the way it traditionally functioned, with many restaurants moving towards the cloud kitchen model and having to adapt to digitally innovative ways to survive. In the midst of this shift, the Foodics team fast-tracked the product development of Foodics Now. “It is a new platform that allows restaurant owners to have their own online ordering platform, accept online payments, manage delivery as well as curbside pick-up orders,” explains Al Zaini of the new offering that was created with the aim to better support the ecosystem for traditional/dine-in restaurants.
The startup’s other new offering, Foodics Capital, was targeted towards helping small and medium enterprises (SMEs) in Saudi Arabia and beyond. “We wanted to revolutionize SME lending, by enabling faster and more flexible lending than most of the lending facilities in the region,” Al Zaini elaborates. “To that effect, we set up Foodics Capital, in partnership with the KSA-based Maalem Finance, leading provider in Shariah-compliant consumer and SME financing.”
Another interesting avenue of revenue generation for the startup came in the form of hosting educational webinars given by industry experts, where insights on driving meaningful transformation were shared with business owners.
With such precise, situation-based modifications it isn’t particularly shocking to know that the team aims to expand Foodics’ services beyond the MENA region to go international. “By 2022, our goal is to have 500 employees, and we are actively seeking extraordinary talents to join our team and grow together,” explains Al Zaini. “Our vision has always been beyond Foodics, with the aim to grow the ecosystem as a whole, under our mantra, “growing together." Our long-term goal is to allow restaurateurs to focus on their product, while we develop tools, data, and insights to help them make the right decisions.”
TREP TALK: Foodics co-founder and CEO Ahmad Al Zaini's tips for entrepreneurs
1. Do your homework "Always carefully consider the market size, the potential growth, as well as the product fit before entering the market."
2. Validate your concept "Run your idea and concept past trusted people from your personal network, before setting off on the new venture."
3. Decide carefully where to operate from. "A good thing is that nowadays there is financial support available to help set up a business and create a website, as well as plenty of office sharing platforms to get started."
4. People come first. "Focus on attracting and retaining talented employees. Human capital is always a strategic competitive advantage any business depends on."