How Saudi Arabia-Based Foodics Became The GCC Region's Most Prominent Foodtech-Meets-Fintech Player Since its inception in 2014, Foodics has successfully processed over six billion orders through its platform, and it has been focused on significant regional expansion plans.
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Nine years. That's how long Foodics, one of Saudi Arabia's most prominent fintech-meets-foodtech startups, has been operating out of the Kingdom, offering point of sale (POS) and restaurant management platform and payment systems that caters to F&B establishments.
Foodics partners with everyone from traditional dine-in restaurants, cafés, quick-serve or fast-food restaurants, to bakeries, food trucks, cloud kitchens, and even non-food micro-retailers. Nine years and more than US$198 million in fundraising later, Foodics is a well-known brand born out of Saudi Arabia's startup ecosystem. The company also ranks third overall in a list ranking Saudi startups the total amount they have fundraised.
Foodics is well-positioned working at the cross-section of two indelible and high-growth segments: fintech and foodtech. The two Saudi startups that have raised more than Foodics thus far, Tamara and STC Pay, are both fintech players, and the Kingdom's only unicorn to date, Jahez, is a q-commerce food delivery player that successfully had an initial public offering (IPO) in 2022. Just in July 2023, Germany's food delivery conglomerate Delivery Hero completed its acquisition of HungerStation, Saudi's other local food delivery giant, for $298 million.
Source: Lucidity Insights
Foodics is at the forefront of F&B digital and payment solutions in the region, operating in over 35 countries. "We're a restaurant management solution with payments at the heart of our business," says Omar Knio, Foodics' Marketing Director. The company's payment solutions combine both hardware and software solutions, and include self-ordering and payment kiosks, mobile payments such as mobile-POS and split pay, allowing for faster checkouts and faster table turnovers.
Omar Knio, Marketing Director, Foodics. Source: Foodics
In April 2022, when the startup had closed its $170 million Series C funding round, Ahmad Al-Zaini, co-founder and CEO of Foodics, had noted that the business had come a long way since its early days. "We are proud to have been able to secure capital from premium international tech investors to further power our journey," he had said. "This latest investment will enable us to accelerate the development of our end-to-end tech stack ecosystem to better support the F&B entrepreneurs and owners who make up the majority of our client community." 15 months after those words were spoken, it seems that Foodics has indeed been working to support their clients in a variety of new ways.
Ahmad Al-Zaini, co-founder and CEO, Foodics. Source: Foodics
Since its inception in 2014, Foodics has successfully processed over six billion orders through its platform, and it has been focused on significant regional expansion plans and doubling-down on becoming "the best partner we can be to our F&B clientele," as Knio puts it. Here, he is referring to Foodics' fintech and micro-lending products, which were officially relaunched in pilot mode this past month. Foodics Capital is a micro-lending platform that allows Foodics' F&B clients to apply for anywhere between SAR50,000 to SAR2 million in financing.
When asked why Foodics Capital is so important to the company, Knio stressed that Foodics is striving to become a real business partner for its clients. "Our clients' success is our success," he says. "It's no secret that the restaurant industry is one of the toughest businesses to run, especially in a post-pandemic market. Restaurants are vulnerable, and it's an industry where restaurant owners are constantly having to worry about cashflow." Foodics Capital thus provides an opportunity for those F&B businesses that wish to grow, but don't have access to capital to do so- and thereby give them a leg-up. "Our payments data off of our Foodics restaurant management system give us unique insights into our customers' revenues, cash flow, and credit history, and our proprietary algorithms help us to assess risk much more effectively and efficiently compared to traditional banks," he says.
Source: Lucidity Insights
Foodics says that it has always been customer-obsessed, and when you're customer-obsessed, you realize how big an issue cash flow is for restaurant and F&B operators. That's why Foodics helps to expedite its customers' cash flow cycles by having its payment solutions settle payments twice per day, unlike some fintech players that only settle payments a few times per week. The same thoughtfulness was put forward in designing Foodics Capital, alongside its capital partners, Tenmia. Foodics Capital decided to streamline all processes where possible, and work to remove all repayment plan stress from their customer's shoulders. It has done this by simply automating payments, by paying itself back through the Foodics Restaurant Management platform. In essence, every time the restaurant completes a sale, Foodics deducts a small percentage from every payment until the loan is paid back in full.
Once the pilot testing amongst a select group of Saudi customers is completed, Foodics Capital intends to go live to the broader Saudi public in October 2023. "We're going to do something massive to help Saudi F&B businesses finance themselves," adds Foodics COO Djamel Mohand.
Djamel Mohand, COO, Foodics: Source: Foodics
Foodics is also launching various new features and solutions this year, off the back of its US $170 million Series C funding closed in 2022. The first of these is Foodics One, which targets retailers through an innovative handheld device that simultaneously acts as a payment terminal, cashier, and printer. It is being presented to Foodics' customers under the banner, "One device is all you need." The brilliance of Foodics One lies in its versatility, as it eases the retail experience, especially for micro and small service businesses. The simplicity of having everything in one device significantly diminishes the likelihood of operational errors, providing a seamless experience for staff, increasing productivity, and leaving clients more satisfied.
Foodics One also integrates with various Foodics partner apps for inventory management, accounting, and business intelligence. Through the intuitive and comprehensive dashboard, one can manage products, set prices, issue reports, and keep track of your business affairs, all from the comfort of your device. Foodics One is the ultimate multifunctional device that not only simplifies sales operations, but it also enhances the checkout experience, provides quick payment settlements, and ensures regulatory compliance. The future of retail is here, and it fits right in the palm of your hand.
Source: Lucidity Insights
Foodics Online is another new product that Foodics is launching this year. Foodics Online allows restaurant and café owners to run an online store through their own websites. Foodics says all that's required is filling out an application, which gets approved in record time. The idea is that F&B establishments yet to have an online presence will be receiving orders online in no time, expanding their service reach beyond their local vicinity. Foodics Online isn't just about sales though; it's about strategic growth. Equipped with a diverse range of advanced marketing tools, restaurants can highlight profitable items, launch loyalty programs, target different customer segments, and even broadcast attractive discounts.
Foodics Online also revolutionizes the dine-in experience. The platform's QR code feature enables customers to order directly from their tables using their phones, automatically relaying the order, table number, and branch source to kitchen staff. By being a commission-free platform, Foodics Online saves restaurants money on every order compared to third-party aggregator apps. Additionally, the platform's seamless integration with Foodics' POS eliminates third-party errors to track every order's status efficiently. The platform also enables marketing teams to understand their customers better, collecting data to help target them effectively with tailored offers and well-crafted campaigns. As the Foodics team put it: "Foodics Online is the friend every restaurant needs nowadays, as an online ordering system powered by centralized tools to maximize profits. It provides complete control over takeout and delivery orders from a single screen on the POS."
In the last decade, venture capital investments in restaurant management software have seen an impressive upswing, reflecting a growing global interest in this sector. This trend is a testament to the transformative impact that these platforms have on the F&B industry, bringing digitization, efficiency, and innovation to the forefront. Having raised over $198 million in funding over the past nine years places, Foodics squarely within the top 10 global restaurant management software companies, by fundraising. There are over 2,600 companies globally in the restaurant software-as-a-service (SaaS) space, of which over 450 have been funded with a collective $6.6 billion of investment. Investors are expecting some major winners to come out of this industry, and Foodics can count itself among a small group of under 100 companies across the globe that have raised beyond a Series A funding round. The surge in VC investments globally not only demonstrates the burgeoning potential of the foodtech-fintech intersection, but it also underscores Foodics' prominence and growth potential in this dynamic landscape.
Source: Lucidity Insights
Foodics also recently partnered with virtual drive-through startup, n.go, which has been a pioneer in the field. n.go offers an innovative platform that enables customers to order from their favorite F&B brands, and then pay directly through the app, receiving their orders seamlessly, without the need to exit their vehicles. Together, the two companies now aim to streamline the customer experience, reduce manual labor for restaurants, and provide valuable customer insights to improve services.
"By integrating n.go onto our platform, Foodics' clients will be able to serve existing customers, and also acquire new customers, who prefer in-restaurant or curbside pickups, seamlessly through the Foodics cashier app," says Al-Zaini. "We are proud to welcome homegrown pioneers such as n.go to the extended Foodics family." Meanwhile, Mazen Ghalib Al-Abdullah, founder and CEO of n.go, said that the partnership is a "win-win situation for both n.go and Foodics," noting the opportunity for increased customer convenience and growth for both companies.
All in all, Djamel anticipates that Foodics' diverse payment solutions will account for nearly 50% of total revenue, and that it could triple annual earnings. They aim to have at least 70% of current customers using these payment solutions within the next six months to a year. As a dominant player in Saudi Arabia's startup ecosystem, Foodics is revolutionizing the intersection of foodtech and fintech, across multiple geographies across the globe. The company has truly solidified its role as a pioneer and leader in the F&B digital solutions and payment systems space, but the team insists that they are only getting started.
To read more about the future of food and the growing business of foodtech, check the full report, The Growing Business of Foodtech, here.
This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa's tech and entrepreneurial ecosystems.