A business built around increasingly personalized, ready-to-eat meals has enabled Middle Eastern startup Calo to pump significant capital into expanding both. what We can provide services to customers who are pressed for time. where We offer a growing variety of dishes that can be cooked and eaten.
The Middle East meal delivery market will also take a hit. $11.2 billion by 2030According to the report Contents of MarkNtel Advisors published last year. Food aggregators such as Careem, Deliveroo and Talabat have built large businesses by capitalizing on the habits of busy professionals ordering food rather than preparing meals in person due to the COVID-19 pandemic.
Riyadh-based Calo differentiates itself by offering tailored meal subscriptions for specialties such as weight loss, high protein intake or balanced eating. It targets customers who are interested in what they eat, not just when their food arrives.
The startup plans to focus more on customizing meals to meet more personalized segments and food requirements, such as meals for people seeking to gain muscle mass or suffering from diabetes, irritable bowel syndrome (IBS) or polycystic ovary syndrome (PCOS). . Calo’s premise is that people in these categories will pay a premium for the ability to customize food to meet their convenience needs.
The company is so confident it is on to something that it is in the process of acquiring an unnamed food startup in the UK next year to expand its presence outside the Middle East, and also has ambitions to go global.
To fund the new growth vector, Calo raised $25 million in Series B funding led by Nuwa Capital with participation from Khwarizm Ventures and STV. In particular, these investors are all reinvestors.
Calo is currently valued at around $250 million, according to multiple sources interviewed by TechCrunch.
The startup, which operates in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Bahrain, allows users to choose healthier ready-to-eat meals including breakfast, lunch, dinner and snacks, with meal filters such as balanced, high-protein, low-carb and healthy options. We provide. Vegetarian. Users can customize their meals and plans, and even skip days.
This approach has given momentum to the region. This year, Calo served 10 million meals, with the average meal costing between $7 and $9.
In addition to the Series B round, Calo said it aims to close a $25 million expansion round by the first quarter of 2025 and aims to go public within the next few years. Therefore, this could be the company’s last tranche of financing before listing in Saudi Arabia. (With Series B closed, Calo has raised a total of $51 million across multiple rounds.)
“Offering ready-to-eat meals that are nutritious, healthy and tailored to your needs is a powerful idea,” Khaled Talhouni, managing partner at Nuwa Capital, said by phone. “Whether you want to build muscle or lose weight, Calo offers customized meals, and that idea excites us.”
“There is an inherent tendency in the GCC (Gulf Cooperation Council) markets to order food. This is why companies like Talabat and Deliveroo are successful. Moreover, Calo’s logistics model, such as bulk milk production, puts us in an advantageous position,” he added.
Calo was launched in Bahrain by Ahmed Al Rawi in 2019. Before that, Al Rawi founded another startup that allowed people to book sports venues and participate in ongoing games. He later advised startups in New York before starting Calo.
“Before starting a startup, I thought there wasn’t much to do in the food delivery field because startups like Careem already existed. However, we realized that some customers wanted customized meals with specific calories or ingredients and that incumbents did not offer this level of personalization,” Al Rawi told TechCrunch over the phone.
He pointed out that there are services that provide meal recommendations based on an individual’s height, weight, age, gender, and activity, but they do not provide actual meals, making them unsuitable for busy office workers. Therefore, Al Rawi seized more opportunities. Customized meal delivery.
According to Calo, people are buying 30% more meals through this service compared to on-demand food aggregators (such as Careem). This stickiness stems from the convenience of meal delivery and saving customers the hassle of finding the right dish to suit their health goals.
The company operates one central kitchen per city and makes deliveries across the city using vans, with the help of small vans and individual riders. Per Al Rawi, Calo currently has a fleet of 200 vans operating throughout the Middle East.
Customers will receive their meal cold and can reheat it in the microwave or using a pan on the hob. The startup said it has been able to keep operations fast and efficient by not having many delivery centers and sticking to scheduled deliveries.
future roadmap
In addition to opening up new segments mentioned above, Calo plans to introduce even deeper personalization for its users. For example, you can specify or remove the exact portion of protein, carbohydrates, or fat you want from your meal. ingredient.
Startups are also experimenting with new business models, including retail kiosks and on-demand delivery services for takeout meals in places like corporate offices.
Saudi Arabia currently accounts for 70% of Calo’s revenues, with the UAE coming in second at 15%. However, Al Rawi said he expects the UAE to grow exponentially in the coming years.
This year, Calo has achieved nine-figure annual revenue and is nearly breaking even. The company aims to turn a profit by next year ahead of its listing.
“Because we are capital efficient, we would not have had to raise money and would have grown organically. But we see new growth opportunities. So, we raised funds mainly to expand our business model, serve more sectors and open up new geographies to serve,” Al Rawi added.
