Generation Start-up: From e-grocery automation to robotics, Kuwait's Raha is aiming high

Company raised $7 million in pre-series funding round in November and plans to secure more financing next year to fuel growth across GCC

Raha delivers groceries and household goods to clients from a fully automated robotics-fulfilment centre. Photo: Raha

Saleh Al Tunaib is a serial entrepreneur who is not afraid of failure.

“Follow your passion and learn from your mistakes” is the mantra of success for the Kuwaiti national, who has tested his own entrepreneurial limits by wading into ventures from mobile grocery shops to a restaurant company and a crowdfunding platform.

His latest venture, Raha, a Kuwait-based e-grocery and logistics tech venture, is the culmination of his experience over the past decade.

The start-up is testing new highs for logistics robotics and automation in the e-grocery sector in the region.

“I'm a person who just loves to take on challenges and explore new territories that I haven't yet tested and that, I guess, is part of the DNA of any entrepreneur,” says Mr Al Tunaib, co-founder and chief executive of Raha.

“I embraced these challenges every day, and I believe that's what led me to be where I'm today.”

The online grocery market in the Middle East and North Africa region has been growing steadily, anchored by an acceleration in the grocery and food delivery categories.

The Mena online grocery market was worth $4.5 billion last year and is forecast to grow at a compound annual growth rate of about 24 per cent, hitting $25 billion by 2030, consultancy firm RedSeer said.

The global online grocery market, meanwhile, was valued at $50.28 billion in 2022 and is anticipated to grow at a compound annual growth rate of 26.8 per cent from 2023 to 2030, Grand View Research said.

The changing shopping preferences of consumers in the wake of the pandemic and the unabated growth of the e-commerce industry are expected to drive the market's growth over the forecast period, it said.

With a master's degree in accounting from the University of San Diego, Mr Al Tunaib started his career in Kuwait in 2010, working for companies including Kaiku Finance, IFA Foods and Kuwait Real Estate Company.

He cofounded Jaribha, a crowdfunding platform in 2011, and later went on to work for the OnCost Cash and Carry chain of grocery stores in 2013, where he rose through the ranks to become chief executive in 2016.

During that time, he worked on his entrepreneurial ventures and his passion for Japanese food led to the creation of NU Restaurants, which managed four restaurants in Kuwait.

He also co-founded Baqal, a mobile grocery delivery company in 2015, a venture that taught him a “few good lessons”, he says.

It was during his chats with one of the international brands that wanted to expand into the GCC markets when Mr Al Tunaib realised the need for adding automation to fulfilment centres of an e-grocery business to boost efficiency, increase volumes and cut costs in the longer run.

While talks with the international investor did not materialise, Kuwait’s Al Bahar Group and Saudi Arabia’s Al Aujan Enterprises agreed to back Mr Al Tunaib’s venture.

“I also managed to convince them [Al Bahar Group] to not fund it all because I wanted to have a diverse cap table,” Mr Al Tunaib says.

“If you want to really build a start-up that is heavy in assets and also requires a huge capital at the beginning, you need to make sure you have the right cap table to support it.”

Although it is not typical to have a company among the co-founders, Mr Al Tunaib says he “brought the expertise to the table”, and the heavy asset nature of the start-up meant that it had to be backed by companies.

Raha was launched in April 2022 as an e-grocery company, integrating the full cycle of grocery delivery logistics from procurement to last-mile delivery.

The start-up operated from Kuwait’s first fully automated robotic fulfilment centre, with a chilled warehouse capability.

Developed by global warehouse automation specialist, Swisslog, the centre serves as the base of Raha’s technology-driven operational model that uses robots on top of an aluminium grid system to store and locate goods.

The venture raised $6.7 million in its seed funding round, led by Aujan Enterprises and Kuwait’s Nox Management, as well as London-headquartered venture capital company Cedar Mundi Ventures.

Since the launch, Raha has grown to become a multi-sector technology and automation provider offering a range of solutions. ShopRaha remains its automated grocery business in Kuwait.

It serves as a “proof of concept”, however, Raha as a holding company has ambitions to help other companies “replicate its success” through its advisory service, Mr Al Tunaib says.

Raha has added two more business lines: btr.tech, an intelligence-driven logistics consultancy, and Smooth Logistics, which provides third-party logistics services.

The btr.tech’s robotics and automation solutions have already started making significant inroads in Saudi Arabia and the UAE, as Raha aims to help other companies automate their logistics and fulfilment centres.

The efficiency and productivity are unmatched and despite the upfront costs, robot-operated automated systems have far better profitability margins from the third year onwards when compared with conventional labour-intensive sorting and picking systems in the logistics centres, he says.

“They're almost an in-line [until the third year] and post that just the robotics makes so much more sense after that,” he adds.

“It saves you on manpower, it saves you the amount of real estate you require … and it's also very energy efficient.”

Raha has ambitions to expand its robotics and automation consultancy business across the GCC and beyond.

“There's a lot of support from governments in the GCC for technology, and not just the import of technology, but also to become manufacturers of technology,” Mr Al Tunaib says.

“We believe today, we've led the way in robotics in the GCC, and we want to continue to do that. I would say five years from today, btr.tech could be actually manufacturing robots in the region.”

Last month, the company announced the successful closure of its pre-series A financing round. Led by Soor Capital and Saudi Public Investment Fund-backed private equity company, eWTP Arabia Capital, the latest round has pushed the funds raised so far to $14 million.

Raha plans another round of funding next year, which Mr Al Tunaib says will be “much bigger”.

“We haven't set out a date yet, but I'll say it's going to be the earlier part of next year.”

Q&A with Saleh Al Tunaib, co-founder and chief executive of Raha

Who is your role model?

I draw inspiration from a myriad of individuals, both from within my personal and professional circles as well as the broader global business community.

I believe there's a wealth of knowledge and experience to be gained from people and from companies who have left their mark on the world. Jeff Bezos and his revolutionary work with Amazon or a company like Costco, which changed the face of the retail industry are examples.

Studying and analysing these change makers allows me to continuously learn and adapt, taking bits of wisdom from various leaders, entrepreneurs who exhibit qualities of resilience, innovation and leadership.

What is your mantra for success?

Embrace challenges and continuously learn. In the fast-evolving tech logistics industry, I believe that facing challenges head-on and constantly acquiring new knowledge are key to staying ahead and achieving success.

Are you a risk-taker or a cautious entrepreneur?

I consider myself a calculated risk-taker. It's essential in the tech industry to take well-considered risks to innovate and stay competitive. However, I always make sure that these risks are backed by thorough research and analysis.

What successful start-ups do you wish you had started and why?

I do not wish to have started another start-up as my focus and passion are entirely invested in Raha. Every challenge as well as success with Raha have been a valuable part of my journey. The journey with Raha, from its conception to its current stage and the vision for its future, is exactly where I want it to be. I wouldn't trade this experience for any other start-up story.

Where do you see Raha in five years from now?

In five years, I see Raha as a leading innovator in the global logistics tech market, with focus on integration of robotics across our operations and portfolio. This strategy is not just about leveraging existing robotic technologies, but also about being a pioneer in this space. We aim to shift from importing technology to the GCC, to becoming a hub for manufacturing and exporting innovative robotics. Our goal is to transform the logistics landscape through tailored advisory services and solutions, setting new standards in the industry and contributing significantly to its evolution.

What would you change if you had to do it all over again?

Looking back, the main adjustment I would consider is initiating Raha's journey a bit earlier. The tech logistics sector is a landscape of constant evolution and opportunity, and an earlier start would have provided us with an extended timeline to explore and innovate. This is less about rectifying any missteps and more about maximising our engagement with technological advancements and market shifts from the very beginning. The timing of Raha's launch has been a key factor in our success, but an earlier entry into the market could have offered even more opportunities for growth and innovation.

What new skills have you learnt with launching Raha?

Launching Raha has enhanced my ability to blend people with different mindsets and backgrounds into a unified, effective team. This is about more than just team management, it's about creating a collaborative space where different perspectives come together to achieve a collective vision, which is especially vital in the logistics tech sector.

What is your advice for budding entrepreneurs?

Be passionate about your vision but be flexible in your approach. Understand that failure is part of the journey. I personally have failed more than I have succeeded. In building Raha, every setback was a learning opportunity that helped us to adapt and move forward. Building a strong team and not being afraid to seek help are key factors. The path to success is rarely a straight line. It's the lessons we learn and how we apply them that define our journey.