Generation Start-up: iKcon cooks up strategies to have bigger bite out of foodstuff delivery market

Dubai-based cloud kitchen enterprise iKcon plans to improve more money to expand its businesses over the Middle East as demand for on the web food delivery in your community continues to grow.

The business, founded in 2019 by Khalid Baareh and Kareem Abughazaleh, recently secured $5 million (Dh18.36m) found in pre-Series A funding from Kuwait’s Arzan CAPITAL RAISING, family-owned Saudi corporations Al Touq Group and Nazer Group, and others.

“We are finding your way through our Series A funding round, which we focus on to summarize by December of the year,” leader Mr Baareh says.

He didn't disclose how much iKcon intends to improve. The company has got appointed Lumina Capital Advisers to suggest on the fundraising.

“This will support our growth plans by allowing us to keep our UAE expansion plan, scale [up] our Saudi Arabia operations, hire the very best talent across all disciplines and functions and, most of all, continue investing heavily inside our proprietary technological capabilities and solutions.”

The company was primarily funded by a little band of friends before a seed round grew up last year, accompanied by the recent pre-Series A funding. It offers secured more than $10m up to now from investors over the GCC.

Cloud kitchens, or ghost kitchens, are professional establishments that produce foodstuff specifically for delivery.

They don't have dine-in areas and contain shared kitchen spaces with culinary professionnals preparing food that's then sent to customers at home or at work, typically through online delivery platforms such as Zomato, Deliveroo, Talabat, Uber Eats and others.

The concept has been gaining traction. Uber founder Travis Kalanick obtained US-based CloudKitchens in 2018 and has been investing in competitors such as Foodstars, which is based in London, to increase the business.

“Covid-19 has re-emphasised the value of food delivery and the convenience that it brings to businesses and consumers. Moreover, existing restaurant groups are seeing reduced dine-in demand due to Covid[-19] and bigger dependency on delivery,” Mr Baareh says.

The business has 10 cloud kitchens in different places in Dubai and Abu Dhabi, and it plans to open new cloud kitchens in Sharjah.

“We generate earnings from the consumer food orders through [countless] revenue channels such as for example delivery apps, directly through our customer support call center and online systems such as Instagram,” Mr Baareh says.

“We are also regularly innovating into new types and will be announcing some fascinating partnerships soon that induce entirely new earnings streams for all of us.”

The business is partnering with several restaurants in Dubai to cook food and deliver it with their customers.

He said the UAE was still an under-penetrated market with opportunities for all cloud kitchen operators to grow.

“We welcome your competition and want to see our markets grow.”

Global brands on the food industry such as Jollibee are also entering the cloud-kitchen space.

The Philippines-based company opened its first cloud kitchen in Singapore previous month.

Start-ups in the centre East and North Africa secured $659m in financing in the first one half of this year, a rise of 35 % from the prior year, according to info platform Magnitt.

The UAE received the greatest share of funds raised while Egypt was ranked first when it comes to the number of discounts, accounting for 25 % of the region’s total.

“We happen to be keen to keep expanding within the region and are fortunate to possess highly engaged shareholders over the GCC and encircling countries ... you will see more expansion announcements apart from Saudi Arabia quickly,” Mr Baareh says.

He didn't divulge which other marketplaces the business intends to expand to but said iKcon's “concentrate is on the Middle East and we are keen to start our operations in additional countries in the region”.

Mr Baareh, who keeps a master's degree in Business Administration from the London University of Organization, decided to start the business along with Mr Abughazaleh after looking at “significant acceleration” in the adoption of technology that really helps to deliver food to consumers through online channels.

“Found in mid-2018, we realised that enough time was right for all of us to map away our cloud-kitchen perspective with technology coming to the primary of our strategy and execution.”

Mr Baareh’s background was in consulting and individual equity, including experience with businesses in the food and beverage space.

Mr Abughazaleh’s encounter is in food businesses and production.

He has founded and invested in several successful food-related firms.

“We launched iKcon with a perspective to become the marketplace head in cloud kitchens in your community and to introduce modern and tech-advanced companies to the food and beverage landscape. We are optimistic about our future growth.”

The company has 400 employees and intends to hire about 600 by the finish of the year as demand for cloud kitchens grows over the region.

Other cloud-home companies in your community are also successful in raising money to petrol growth. Dubai-based Kitopi brought up $60m in a string B round in February and explained the funds allows it to include 100 more locations around the world by the end of the year.

Founded by Mohamad Ballout, Saman Darkan, Bader Ataya and Andres Arenas, Kitopi has a lot more than 1,200 employees and features partnered with an increase of than 100 eating places such as Operation Falafel, Pizza Exhibit and Right Bite.

Company profile

Name: iKcon

Founders: Khalid Baareh and Kareem Abughazaleh

Based: Dubai

Founded: 2019

Number of employees: 400

Sector: Food technology

Financing: $10m, including a recently closed pre-series A circular of $5m led by Arzan CAPITAL RAISING, AlTouq Group and Nazer Group

Future plans: Seeking to raise new capital and expand in Saudi Arabia

Q&A with Khalid Baareh, co-founder and leader of iKcon

What powerful start-ups do you wish you might have started?

There are a variety of start-ups that contain made a huge impact on our day to day lives including Uber, Careem, Amazon, Airbnb and Alibaba. Amazon modified the e-commerce business and Uber and Careem completely transformed the travel and logistics business.

What is your vision for the company?

To be the regional innovator in the cloud home space. We want to redesign your kitchen procedures and food production organization in your community using our know-how and technology. There are huge opportunities in this discipline.

Who are your customers in your community? How was your theory developed?

Our customers are well-established eating places, chains and foodstuff entrepreneurs - many having an international presence - with unique ideas and principles, who are looking to extend their reach while maintaining the same quality level and consistency.

What's your mantra for success?

I always pass mindset and a positive, right mindset will lead to achievement. I am glad to get surrounded by remarkably talented people who are assisting us to scale our functions and grow our business. I awaken every day in fact it is a blessing to be doing what I am carrying out.

Where do you see yourself and iKcon in five years?

My focus is going to be purely on building another regional unicorn and We can’t imagine doing other things. The next five years are essential, transformational years for the meals and beverage market and we at iKcon happen to be aiming to end up being the regional innovator in functioning cloud kitchens. We happen to be centered on technology and operational excellence, which will be essential as the consumer will have a good amount of brands to pick from and is usually increasingly counting on technology to save time across several areas of their life.

How does one envision a post-Covid 19 world?

Consumer behaviour had been evolving rapidly in the last year or two. I am convinced that the new buyer behaviour is here to stay, and the brand new market dynamic can be the norm.