With An Aim To Achieve US$1 Billion In Gross Merchandise Value By 2024, UAE-Based KASO Is Reshaping The Food Procurement Industry Most recently, in July 2023, KASO closed a $10.5 million seed round.
By Ashok Raman Edited by Aby Sam Thomas
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In a tale of two friends-turned business-partners, Manar Alkassar and Ahmed Soliman's entrepreneurial journey began over 13 years ago when the two connected at a young leaders' conference in Germany.
Their shared love for technology and their Arab roots forged a bond that would eventually lead to the two creating and launching a digital B2B food supply ordering platform in Dubai that would help streamline the F&B industry's supply chain, minimize food waste, and improve the overall sustainability of the MENA food industry.
But we've skipped a few plot points in this entrepreneurial story. Let's start from the beginning.
Alkassar was the first to move to Dubai in 2014, embarking on a mission to build new tech ventures for German tech incubator, Rocket Internet, which also happened to own online food delivery aggregator, Talabat, and fashion e-commerce player, Namshi.
Alkassar eventually established Helpling Middle East, an on-demand maid service tech company out of Dubai, and eventually became the CEO of this "Uber for home cleaning services."
Having settled nicely into life in Dubai, Alkassar persuaded his future co-founder Soliman to join Hellofood/HungerStation, a leading food delivery startup in Saudi Arabia, which was later acquired by Delivery Hero.
Delivery Hero is a German food delivery giant making its presence known in the Middle East, with a growing foodtech footprint which includes players like Instashop, Zomato, and Carriage in their regional portfolio.
HungerStation's acquisition set the stage for Soliman to take on senior roles at Talabat- another indirect Delivery Hero acquisition, before being promoted to a VP role at Delivery Hero, overseeing logistics and operations across the growing MENA region.
Source: Kaso
It wasn't planned, per se, for these two to gain so much experience in the foodtech, e-commerce, and marketplace industries, but after so many years immersed in it, it comes as no surprise that the startup they would launch was KASO, which seems to take a page out of each of these segments.
But it wasn't as simple as it may look from the outside. The two co-founders admit that prior to launching KASO, they were in fact working on something else entirely together. The two initially were looking to build a tech-enabled q-commerce coffee-delivery startup that would work with existing restaurants to deliver coffee to consumers across various neighborhoods.
As they were doing their market research and speaking to existing restaurant and café owners, the entrepreneurs discovered that procurement was a consistent major pain-point in the F&B industry, that was mostly still conducted on pen and paper, with orders being largely made over the phone, over WhatsApp, or at worst– some were still using fax machines to submit weekly orders!
The startup originally launched under the brand name Elkaso in June 2021, when the first member joined the team, the first restaurant came onboard, and the first order was placed marking the inception of their journey.
Within two months, the startup had achieved 100+ daily orders on their online B2B food procurement platform. The momentum continued with the announcement of their first round of pre-seed funding, raising US$2.1 million in September 2021. The pace of progress remained unyielding as they launched the marketplace in October 2021, attracting over 500 active customers.
KASO was accepted into the prestigious Y Combinator program in 2022, which was no small feat. Y-Combinator's acceptance rate is between 1.5% to 2%, with the program accepting only a handful of players out of 10,000+ startup applications in each funding cycle.
During their time in Silicon Valley, they dived into financing and payment verticals, initiating the groundwork for growth. In February 2022 Elkaso officially rebranded to become KASO, signifying a new trajectory, and have not slowed down since.
KASO has gone on to launch in Saudi Arabia, broadening their reach and impact. The team piloted a new fintech last year, and after witnessing success and the impact of this vertical, launched it officially this year, for their F&B customers.
The company also unveiled restaurant credit facilities and a buy now pay later (BNPL) offering, thereby providing innovative solutions for its partners. 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," Soliman explains. "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 fee to secure extended credit terms and have all their payments handled by KASO, while suppliers received immediate payments."
Related: How Saudi Arabia-Based Foodics Became The GCC Region's Most Prominent Foodtech-Meets-Fintech Player
Today, KASO is an international force, active in four countries. They have proven successes with onboarding not just local restaurants, but also by going live with esteemed brands such as Burger King, Texas Chicken, Buffalo Wild Wings, Chili's, and Tim Hortons, which do high volumes.
The company now has logistics and express delivery capabilities, "further streamlining our operations," Alkassar adds. And earlier this year, KASO began with a strategic partnership announcement with Foodics, further expanding KASO's network and influence.
"Our outlook for 2023 indicates promising growth, with a projected gross merchandise value (GMV) run-rate of AED1 billion by year's end. The forecast for 2024 sets the bar even higher, expecting to achieve a GMV of $1 billion."
KASO aims to create a larger impact that goes beyond numbers and financial success. The question of food waste arises, and KASO addresses it head-on. Their innovative ordering tool, combined with a transparent approach, empowers restaurants to avoid oversupply.
Ahmed Soliman and Manar Alkassar, co-founders, Kaso
Moreover, its marketplace offers a platform for suppliers to sell nearly expired items, leading to reduced waste and lowered costs. "Our approach not only benefits restaurants and suppliers, boosting profit margins by 15%, but also contributes to the fight against climate change. By tackling food waste, a major contributor to global greenhouse gas emissions, KASO aims to play a vital role in curbing environmental damage."
The company's efforts are also directly in-line with the UAE's sustainability ambitions, and KASO's founders emphasize their desire to become a leading change-agent when it comes to reducing food waste. But what the founders are most proud of so far is the transformations that suppliers have witnessed through their partnership with KASO. The marketplace, coupled with an active sourcing team, fosters connections between suppliers and various food concepts, creating new business opportunities.
"Monthly, around 1000 fresh connections are made, ranging from single-item orders to comprehensive basket deals. We don't stop generating new business while also focusing on strengthening existing customer relationships. The result is an enhanced customer experience and strengthened ties between suppliers and their clients."
Operational efficiency is a key highlight of KASO's impact on suppliers. The platform has saved an impressive 80% of the time previously spent on procurement. "Branch and purchase managers, who used to allocate around 2 hours each day to ordering from different suppliers, now accomplish the task in a mere 10-15 minutes. This time-savings allows them to focus on other crucial aspects of their business such as customer service and cleanliness."
Though KASO has been growing and meeting successes on its entrepreneurial journey, expanding into new markets has not been without its challenges.
"Each market presents unique characteristics that necessitate understanding and strategic adjustments," says Soliman. "For instance, when we ventured into Saudi Arabia, we encountered a market with a more manual operation and less organization compared to operations in the UAE. In response, we integrated WhatsApp into their system, leveraging its popularity in the region and making onboarding of customers easier in the Kingdom."
But the founders tell us that the recent shifts in consumer behavior, catalyzed by the COVID-19 pandemic and the resultant digital transformation in the restaurant industry have played a significant role in shaping KASO's expansion plans. Customers rapidly adapted to online ordering, creating increased competition among businesses. Furthermore, the challenges faced in the food supply chain prompted restaurants and F&B brands to improve their organization and adaptability.
Amidst inflationary pressures, KASO has successfully onboarded renowned brands like Caribou Coffee, Lorenzo Pizza, and 1/2 Million Coffee at a faster pace than anticipated. Their initial focus on restaurants has expanded to encompass coffee shops, catering services, and cloud kitchens. Currently, they are making inroads into the hotel segment as well. This evolving expansion strategy covers not only all GCC countries and the Middle East, but also international markets, aligning with the dynamic nature of the industry.
Most recently, in July 2023, KASO closed a $10.5 million seed round. KASO's cap table includes both international and regional investors made up of venture capitalists, family offices, and angel syndicates from as close as Saudi Arabia and United Arab Emirates, and from as far away as the USA, Singapore, Germany and China.
The future looks bright for this regional foodtech player, looking to streamline the MENA F&B supply chain and help alleviate customers' cash-flow challenges.
To read more about the future of food and the growing business of foodtech, check the full report, The Growing Business of Foodtech, here.
This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa's tech and entrepreneurial ecosystems.
