Middle Eastern startup Calo has injected significant funding into offering time-poor customers and a growing range of heat-and-cook products, with a business built around increasingly customized ready-to-eat meals. We are trying to expand both of our customers. -Eat food.
The Middle East meal delivery market is expected to reach $11.2 billion by 2030, according to a MarkNtel Advisors report released last year. Food aggregators like Careem, Deliveroo, and Talabat have built large businesses by capitalizing on the habit of busy professionals ordering meals rather than preparing them themselves. This was primarily driven by the COVID-19 pandemic.
Riyadh-based Calo differentiates itself by offering customized meal subscriptions for special segments such as weight loss, high protein intake, and balanced diets, and allows you to choose when your food will arrive. as well as customers who care about what they eat.
The company is developing meals to meet more personalized demographics and dietary needs, such as those seeking muscle gains or those suffering from diabetes, IBS (irritable bowel syndrome), and PCOS (polycystic ovary syndrome). The plan is to put even more effort into customization. Calo's premise is that people in these categories will pay a premium for food customization features that meet their convenience needs.
The company is confident it has achieved something and is also in the process of acquiring an unknown British food start-up as it looks to expand beyond the Middle East as it aims to go global next year.
To fund new growth vectors, Calo raised $25 million in Series B funding led by Nuwa Capital with participation from Khwarizm Ventures and STV. Notably, all of these investors are returning investors.
Calo is currently worth about $250 million, according to multiple sources contacted by TechCrunch.
The startup, which operates in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, and Bahrain, enables users to choose healthier prepared meals such as breakfast, lunch, dinner, and snacks, providing balanced and , which offers meal filters such as high protein, low carb, and low sugar. vegetarian. Users can also customize meals, plans, and even skip days.
The approach is gaining momentum in the region, with Karo saying it will serve 10 million meals this year, with the average cost of each meal ranging from $7 to $9.
Beyond the Series B round, Caro aims to complete a $25 million extension round by the first quarter of 2025, and said it has a goal of going public within the next few years. Therefore, this may be the company's last fundraising before listing in Saudi Arabia. (Now that its Series B has closed, Calo has raised a total of $51 million across multiple rounds.)
“Providing ready-to-eat meals that are nutritious, healthy, and customized to your needs is a powerful idea,” Khaled Talhouni, managing partner at Nuwa Capital, told TechCrunch over the phone. spoke. “Whether you want to build muscle or lose weight, Calo can help you customize your meals. We're excited about the idea.”
“G.C.C. [Gulf Cooperation Council] The market has a built-in tendency to order food. That's why companies like Talabat and Deliveroo are so successful. Additionally, Karo's logistics model is similar to bulk milk transportation, which puts it in an advantageous position,” he added.
Calo was founded in Bahrain in 2019 by Ahmed Al Rawi. Prior to that, Al-Rawi founded another startup that allows people to book sports venues and attend ongoing matches. He then advised startups in New York before starting Calo.
“Before launching the startup, I didn’t think there was much that could be done with food delivery because startups like Careem already existed.However, some of our customers want customized products with specific calorie counts or ingredients. They wanted a meal and realized that existing companies weren't offering this level of personalization,” Al-Rawi told TechCrunch over the phone.
Calo Founder Ahmed Al Rawi (Image credit: Calo)
She noted that while services exist that recommend meals based on a person's height, weight, age, gender, and activity level, they do not provide the actual meal, which is not ideal for busy professionals. did. Customized meal delivery.
According to Calo, people buy 30% more meals on its service compared to on-demand food aggregators (like Careem). We attribute this persistence to the convenience of meal delivery combined with saving customers the hassle of finding the right cuisine to meet their health goals.
Image credit: Caro
The company operates one central kitchen in each city and uses vans to make deliveries across cities, with the help of small vans and personal passengers. Al-Rawi said Karo currently operates a fleet of 200 vans across the Middle East.
Customers receive their meals cold and can reheat them in the microwave or using a pot on the stove. The company said it has been able to maintain fast and lean operations by not having many distribution centers and sticking to regular deliveries.
Future roadmap
In addition to opening up new segments mentioned above, Calo plans to introduce deeper personalization for users. For example, you'll be able to specify the exact portions of protein, carbohydrates, and fat in your meals or remove them. component.
The company is also experimenting with new business models, such as retail kiosks that offer grab-and-go meals in corporate offices and other locations, and on-demand delivery services.
Image credit: Caro
Saudi Arabia currently accounts for 70% of Karo's revenue, with the UAE in second place at 15%. However, Al Rawi said he expected the UAE to grow rapidly in the coming years.
This year, Calo's annual sales hit nine figures and the company is operating close to break-even. The company aims to become profitable by next year before going public.
“Because we are capital efficient, we have not had to raise capital and have been able to grow organically. However, we have identified new growth opportunities. We have raised funds to expand our business model, cater to more segments and explore new regions we serve,” Al Rawi added.