https://arab.news/ygrrn
The global online grocery market has grown rapidly and is estimated to reach $285 billion by 2020.
In the past few years the Kingdom has witnessed an unprecedented leapfrog into the online food delivery market, reaching SR4.4 billion ($1.2 billion) in 2019. The retail sector is considered to be one of the largest sectors of the economy, while groceries are the second-largest expenditure of a Saudi household.
Last Tuesday the Riyadh-based food delivery platform Jahez announced it had raised SR137 million in Series A round funding with Impact46 as its strategic investor. The deal is, to my knowledge, the largest for a Saudi-based startup and one of the largest Series A rounds in the region. It shows how strong the interest is from investors for growth-stage venture capital (VC) opportunities.
Jahez operates a food delivery platform offering a full logistical solution with its proprietary delivery capabilities. The startup claims to serve 3 million users through its network of 15,000 delivery drivers.
It is on its way to exceeding SR1 billion in order value this year, sourced from over 12,000 points of sale across the Kingdom. It has processed more than 20 million orders and partnered with brands like McDonald’s, Burger King, Pizza Hut, SACO, and Whites Pharmacies.
Another exciting story is the app Nana, an online grocery store targeting the youth demographic that has quickly evolved into the largest online grocery marketplace in the region.
Last March Nana announced a SR67.5 million Series B round to further drive its growth, along with plans to expand its geographical footprint into different countries in the region. Participants in that round included Impact46, Wamda Capital, MEVP, Watar Partners and the Saudi Venture Capital Co. (SVC).
The first round for Nana was in May 2016, when Nana raised SR7.88 million in the seed round by angel investors, followed by a SR8.25 million convertible note round in 2017. In 2019 Nana raised SR24.8 million in the Series A round.
As part of its Vision 2030 reform plan the government is supporting young Saudi entrepreneurs and their international partners to explore promising Saudi-based VC opportunities in different sectors.
The SVC, headed by Nabeel Koshak, was set up as part of the Private Sector Stimulus Office with the objective of stimulating venture investments in funds along with angel and institutional investors.
SVC invests in VC investments and lowers the barriers to entry for fund managers looking to operate in the VC market. It also invests along with angel investors, venture capitalists and institutional investors to stimulate seed, early stage, and growth-stage investments in startups.
In my opinion, the Saudi market has been a regional magnet for leading businessmen and entrepreneurs. Rami Al-Turki, Abdulrahman Tarabzouni, Yamen Al-Hajjar, Faris Al-Rashed, Abdul Aziz Al-Omran, to name a few, have successfully invested in startups while still screening and exploring VC opportunities in the food, groceries, logistics and other sectors in the promising Saudi market.
Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.