Dubai start-up GrubTech raises $13m to expand in new markets

The Series A round was led by Addition, with participation from other investors such as BY Ventures and Hambro Perks Oryx Fund

The global ghost, or 'cloud', kitchen market is expected to be valued at $71.4bn by 2027, up from $43bn in 2019, according to Statista. Bloomberg

GrubTech, a Dubai-based start-up that provides an end-to-end operating system for restaurants and cloud kitchens, raised $13 million in an early stage funding round as it seeks to expand to new markets and build on its technology.

The Series A round was led by Addition, with other investors such as BY Ventures and Hambro Perks Oryx Fund participating, the company said in a statement on Tuesday.

GrubTech, which was founded in 2019 by Mohamed Al Fayed, Omar Rifai, and Mohamed Hamedi, helps digitise the back-end operations of restaurants. The company's technology is integral to cloud kitchens and restaurants that process multiple orders, or those which operate various brands.

“Legacy technology in the F&B space is not built for the modern restaurant. This is resulting in a fragmented set of solutions that a restaurateur or cloud kitchen operator is forced to sift through and stitch up. Not only does this complicate their operation, but it also slows down their ability to expand,” said Mr Al Fayed.

Companies like GrubTech have seen their business pick up as cloud kitchens grow in popularity, especially since Covid-19.

Around 70 per cent of UAE-based restaurant operators are planning to set up cloud kitchens or delivery-only brands, according to a recent report by POSist and Dubai Restaurants Group. More than a third expect around 60 per cent of their revenue to come from food delivery this year.

Cloud kitchens, or ghost kitchens, are commercial establishments that produce food specifically for delivery and do not provide dine-in services or takeaway. The global ghost kitchen market is expected to be valued at $71.4 billion by 2027, up from $43bn in 2019, according to Statista.

Even before the pandemic, which disrupted most dine-in restaurants, cloud kitchen revenue within the UAE and Saudi Arabia grew 160 per cent annually to reach more than $65m in 2019.

Their popularity has also led to millions being invested in them within the Middle East. Cloud kitchen Kitopi crossed a $1 billion valuation after it secured $415m from a group of investors, which included SoftBank's Vision Fund 2. Another Dubai-based company, Sweetheart Kitchen, raised $17.7m last year, from investors such as Delivery Hero, which owns food aggregator Talabat.

GrubTech, which helps these kitchens process online orders, raised $3.4m in a pre-Series A round from large regional family offices, a US-based VC firm and some angel investors in March this year. Prior to that it raised $2m in a seed round in 2020.