Egypt's food delivery app elmenus has raised $10 million in a funding round by US and local investors, including New York-based hedge fund Luxor Capital that previously backed global food platforms Zomato, Delivery Hero and Glovo.
The pre-Series C funding round also included investments from Cairo-listed digital payments platform Fawry Group and Egyptian property developer Marakez, elmenus said on Tuesday. Luxor Capital’s investment in elmenus is its first in the Middle East and North Africa.
The Cairo-based start-up will use the funds to expand across Egypt, invest in customising the app's user experience and develop data analysis tools to help its restaurant partners build their businesses through better understanding of customer preferences, Amir Allam, chief executive of elmenus, told The National.
"We are expanding to a lot of new cities within Egypt in our plans to be biggest dominant local player," Mr Allam said. "We are investing in tools and data enablement for restaurants ... to understand their own data, which customers they can attract, the best-performing dishes and how they can improve."
Elmenus also plans to enter other countries in Africa in 2022, because of their geographical proximity, similar demographics and "huge opportunities" in under-served markets, he said. The start-up will also open an office in Dubai to hire talent in the data science and products segments and to provide work flexibility for its employees.
To drive expansion, elmenus is also "hiring aggressively" to grow its workforce of 350 employees, Mr Allam said, declining to provide the number of new hires.
The Covid-19 pandemic has accelerated a push by restaurants to manage their businesses more efficiently, with data tools offering them an opportunity to improve their performance, reach users through a targeted approach and scale up their marketing in the online food ordering segment, he said. Elmenus plans to increase the 12,000 restaurants registered on the app now.
Elmenus, which claims to have more than 1.5 million monthly users, recorded a sharp increase in demand during the Covid-19 pandemic as safety precautions and movement restrictions prompted more people to dine at home and hastened a consumer shift towards online orders.
In February, the start-up secured an undisclosed investment from David Buttress, former chief executive of Just Eat, who is now also on the company's board.
The pre-Series C funding round is still ongoing and elmenus expects it to close "within the coming months", Mr Allam said.
More international investors than regional are joining the funding round and it is too early to reveal the total value of investments, he said.
The Fawry Group, which contributed $1m out of the $10m raised so far, will work with elmenus on digital payment services to serve more restaurants and customers via the app.
"One of the biggest opportunities in Egypt is that there is a lot of unbanked business, including restaurants, and from the consumer side there is a lot of digital enablement to be done," Mr Allam said.
The Fawry partnership enables the company to fill such gaps, helping both restaurants and consumers, he said.
The coronavirus crisis has honed the focus of restaurants on online revenue streams and on streamlining the cash collection process from aggregators such as elmenus, with digital payments easing that process.
Given the importance of cashflow to restaurants, elmenus made changes to its commissions payment process to pay restaurants their fees more frequently during the Covid crisis than the monthly payment cycle previously, Mr Allam said.
The start-up will focus on serving restaurants and diners with more options rather than grow into other online delivery segments such as groceries or pharmacies, he said. "The opportunity is huge here and Egypt is a massive market that is under-penetrated."
With order volumes growing two to three times year-on-year, elmenus recorded gross profit in June and earning net profit is "not too far out", the executive said. He added that elmenus could go public "at a later stage".