How foodtech startup GrubTech is working to transform online food delivery in the Middle East

For serial entrepreneur Mohamed Al Fayed (Moe), starting foodtech startup GrubTech was a no-brainer. It was simply a part of what he has always been doing. 

Founded in 2019, GrubTech is an end-to-end SaaS platform that enables restaurants and cloud kitchens to digitise operations and manage online food orders.  

“I was brought on to the cloud kitchen arena by one of my co-founders who made an investment into a cloud kitchen company. My key takeaway there alongside my co-founders was that we believed food delivery was going to be a critical component of the F&B industry, and taking a closer look, we realised the current technology landscape was not very conducive to that behaviour. Passionate about digitising sectors, we took on the challenge of providing the sector with all the tools required to have an omnichannel operation,” says Moe, an alumnus of Florida International University, College of Business, USA. 

Prior to starting GrubTech, Moe was responsible for taking brick-and-mortar operations to the omnichannel world in the Middle East, and also launched retail brands like MamasandPapas and GAP in the Gulf Co-operation Council (GCC). The other two founders of the company are Mohamed Hamedi and Omar Rifai. 

Apart from this, he introduced the region’s first two-hour ecommerce delivery. He also launched the luxury online marketplace Ounass, and has been the Senior VP, Omnichannel, Al Tayer Group, for over a decade. 

Today, UAE-based Grubtech has raised over $18.5 million and is touted as one of the fastest-growing tech startups in the Middle East. It was also one of the top 50 most-funded startups in the region according to Forbes. The company employs 165 people as of now. 

How it works?

Cloud kitchen food delivery businesses, on average, can house around 10 to 15 brands. If there are 10 brands and four food aggregators, there are a minimum of 40 orders that need to be ready in a short window of time. This includes getting the order to the kitchen, packing, and then reaching the delivery person. All this has a window of two hours. GrubTech takes care of all this minus the actual preparation of the food. 

Cloud kitchens create menus in one place, which goes to the digital channels of food aggregators, apps, websites, and others. Any changes made are reflected across all the platforms. 

“We utilise multiple languages across multiple technology stacks to be able to achieve the end goal. We are heavy on microservices and incredibly pedantic as far as data collection is concerned. We also leverage cloud computing services from AWS to ensure we deliver the objective to the customer at the lowest possible price,” says Moe. 

Once the order is placed, GrubTech uses intelligent routing to send the order to the right station and supply chain in the right order. This gives the team enough time to prep the food. It also provides data and analytics to the operators that help businesses execute and work on the product. 

Building the product and MVP 

“We set up the company in October of 2019. So, four months shy of the pandemic, we had to recruit, build a culture and a company within the confines of our homes as the result of lockdown and quickly adopt digital means like Zoom and Microsoft teams to be able to interview, onboard, and bring productivity to a diverse group of people. And that was not an easy task as the world was trying to make sense of what the future would look like,” says Moe. 

However, the team was fortunate to have connections in the space, which helped it leverage their combined networks and put a core team. 

“We put up the team after we identified what each role would be as the MVP (minimum viable product) requires and we were able to establish our engineering team across two geographies—Turkey and Sri Lanka—really quickly, and built our MVP and put it in the hands of early adopters,” adds Moe. This also helped the team fine-tune the product through feedback and understanding. 

Moe adds that the product today processes food worth hundreds of millions of dollars across 17 geographies.

Software as a Service (SaaS) and a high-margin business typically hovers between 65 to 80 percent. That's simply because the software has very low Capex, but it scales quickly. 

“It travels very well, but requires a large Opex, which in our world would be product and engineering to keep up with the constant reiteration of the software to ensure that you are delivering to customer satisfaction,” says Moe. 

The team charges a monthly subscription fee to its customers, depending on the modules they require for their operation. It ranges anywhere between $40 to $120, and also depends on the geography.

“What sets us apart from our competition is our passion—being as customer-centric as possible. We are fanatical about solving our customer’s problems regardless of their size, location, or their issue. The reason we have grown this fast and managed to attract both small restaurants and international big chains is our obsession with putting the customer at the heart of everything that we do,” says Moe. 

The foodtech market 

Rola Arab, Founder and Director of RA Consulting, in an interview with Fi Global Insights, pointed out that there is a significantly strong untapped potential for foodtech in the Middle East. Several reports point out that UAE is the second-largest market for online food delivery at present, with a market size of $834 million. 

“Foodtech companies need to register food products before placing them on the market in most Middle East countries. It can be a challenge to market novel foods, given the absence of a regulatory framework in the area,” Arab explained. She notes there has been little in the way of development of novel food regulations in the Middle East region. 

At present, the foodtech industry in the Middle East is governed by Talabat, Zomato, Noon, Careem, and Deliveroo. 

Compared to last year, GrubTech has grown over 1,000% this year, and aims to continue to follow that pattern. In April this year, the startup completed $100 million in orders processed. 

“I would say we have been very fortunate to have supporting customers who were early adopters that helped us fine-tune the product that it is today, and we continue to scale rapidly both at a local and global level. We are fortunate enough to serve the heroes cloud kitchens in multiple jurisdictions like Saudi Arabia and the UAE, the core Hotel Groups club kitchen under the banner kitch-in, numerous international brands that are present in our geography, like eating in the new Shanghai and many others,” adds Moe. 

The team is now quite attracted to the Southeast Asian market and sees similar patterns. “Young population, high digital penetration, convenience factors like ordering food and groceries from digital platforms, and we believe that will be the next leg of our race,” says Moe.