"We Got Funded!" KSA-Based Kaso Raises US$10.5 Million In A Seed Round Following The Launch Of Its New F&B Fintech Vertical The new funds are expected to be allocated towards two main areas: its newly launched fintech vertical that targets restaurants, and its short-term goal to achieve a gross merchandise value of US$1 billion by 2024.
By Aalia Mehreen Ahmed Edited by Aby Sam Thomas
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
Saudi Arabia-based restaurant supply management platform Kaso has raised US$10.5 million in a seed round led by multiple venture capital (VC) firms.
The VC firms that participated include BY VP, a MENA-focused VC company that focuses on tech startups, Hala Ventures, a KSA-based early-growth VC fund, Seedra Ventures, a KSA-based early-stage VC firm, Pioneer Fund, a US-based fund that comprises over 340 alumni of US-based technology startup accelerator Y Combinator, Spade Ventures, a MENA and Pakistan-focused angel syndicate that invests in early stage tech startups, Vulpes Ventures, a Singapore-based investment management firm, and Cyfr, a VC firm focused on tech startups in the MENA as well as the US.
The round also saw the participation of regional family offices, other strategic investors from KSA, as well as contributions from VC firms that have previously invested in Kaso, such as Germany-based venture capital firm Global Founders Capital and China-based investment firm MSA Capital.
Launched in 2021 by Manar Alkassar and Ahmed Soliman, Kaso is a business-to-business (B2B) platform that digitizes and automates procurement between restaurants and food suppliers in the Middle East. With new capital under their belt, the co-founders now hope to allocate it towards two main areas: its newly launched fintech vertical that targets restaurants, and its short-term goal to achieve a gross merchandise value (GMV) of US$1 billion by 2024.
With its fintech vertical, Kaso offers digital payment tools and extended credit terms to restaurants while simultaneously ensuring suppliers are paid seamlessly and on time. "By providing extended credit terms, we enhance financial flexibility for restaurants, which can be crucial for their operations," Alkassar tells Entrepreneur Middle East. "Secondly, we ensure timely payments to suppliers, improving their cash flow and reducing payment delays. The model is designed to simplify the payment process for both parties. Restaurants pay a nominal service fee to secure extended credit terms and have all their payments handled by Kaso, while suppliers receive immediate payments."
Source: Kaso
The introduction of such a fintech service within the Kaso platform falls in line with what the startup set out to do in the first place, which is to leverage technology in order to create effective solutions in the food supply chain. And while the digitization of payments has become quite the norm in the regional F&B sector's business-to-customer (B2C) space, it hasn't necessarily been the case within B2B, notes Alkassar. "Kaso's fintech solution addresses the complex credit dynamics and cash flow challenges that restaurants and suppliers face," he adds. "Adoption of a solution like ours allows for better financial flexibility and enhanced trust between both parties. Ultimately, our solution paves the way for a seamless and dependable supply chain that is still a work in progress in the B2B ecosystem."
When it comes to the startup's second area of capital allocation, the co-founders explain that they aim to achieve a GMV of $1 billion by means of expanding its operations and enhancing its technology platform while remaining inducing greater sustainability within the food supply chain. A big part of achieving this goal, therefore, will involve Kaso's continued commitment towards solving the issue of food waste in the region. Indeed, as per a 2021 study by the United Nation's Food and Agriculture Organisation, the MENA as a whole wastes food equivalent up to 250 kilograms per capita a year. "The F&B industry in the MENA region was valued at $135 billion in 2020 and is expected to grow to $171 billion by 2024," Soliman adds. "Our platform has already made a significant impact in reducing inefficiencies in the industry and we are confident that we can continue to make strides towards a more sustainable future".
In addition to the aforementioned measures, Kaso has already partnered with over 5,000 F&B partners in the UAE and Saudi Arabia, including the likes of globally renowned food franchises such as Burger King, Tim Hortons, Caribou Coffee, and Chili's, among others. More notably, the startup has also received funding from US-based technology startup accelerator Y Combinator in February 2022, and also entered into a strategic partnership with Saudi Arabia-based point of sale and restaurant management platform Foodics in January 2023.
The Kaso team. Source: Kaso
Unsurprisingly, such key milestones have earned Kaso the interest of multiple regional investors.
Speaking about his VC firm's investment in Kaso, Ali Abussaud, founder and Chairman of Hala Ventures, says, "We believe that Kaso is perfectly positioned to disrupt the food industry in KSA and the Middle East. Their commitment to reducing inefficiencies and promoting sustainability aligns with our values and we are thrilled to be a part of their journey." Haitham Al-Foraih, co-founder and Managing Partner of Seedra Ventures had similar sentiments to share about his enterprise's role in Kaso's seed round. "At Seedra Ventures, we believe that Kaso is spearheading a much-needed transformation in the fast-growing regional F&B industry, streamlining procurement processes and driving sustainability through cutting-edge technology," Al-Foraih says. "We are excited to be part of their journey and look forward to supporting their continued growth and impact in the Kingdom and wider region."
The positive feedback from investors will prove to be a major stepping stone in what Kaso sets out to achieve next, believes co-founder Alkassar. "It is very encouraging to see strong regional and international investors joining us, especially considering the challenges some startups currently face in the fundraising market," Alkassar says. "This reaffirms our vision to revolutionize one of the oldest industries on the planet, an industry that still runs on pen and paper, phone calls, and WhatsApp. By combining our procurement platform with innovative financial solutions, we are enabling restaurants to thrive in a competitive landscape!"
Related: "We Got Funded!" Dubai-Based HR-Tech Platform Alfii Raises US$2.5 Million In A Pre-Seed Funding Round
