A business built around increasingly personalized ready-to-eat meals has given Middle Eastern startup Calo a significant injection of funding as it looks to expand both what it can offer its customers limited time and where it offers its growing range of easy-to-eat dishes.
The Middle East meal delivery market is about to take a hit $11.2 billion by 2030according to a report by MarkNtel Advisors published last year. Food aggregators such as Careem, Deliveroo and Talabat have built huge businesses by relying on the habits of busy professionals who order food instead of making their own – fueled in large part by the COVID-19 pandemic.
Riyadh-based Calo differentiates itself by offering personalized meal subscriptions for specialized segments such as weight loss, high protein intake or balanced meals – targeting customers who care about what they eat, not just when the food arrives theirs.
The startup plans to further lean into meal customization to cater to more customized segments and nutritional needs, such as tailored meals for those seeking muscle gain or suffering from diabetes, IBS (irritable bowel syndrome ) or PCOS (polycystic ovary syndrome). Calo’s premise is that people who fit into these categories will pay a premium for food customization features that meet their convenience needs.
The company is so sure it’s onto something that it’s also in the process of acquiring an unnamed UK food startup to expand its footprint outside the Middle East next year – with ambitions to go global.
To fund new growth vectors, Calo has raised $25 million in Series B funding led by Nuwa Capital with participation from Khwarizmi Ventures and STV. Notably, all of these investors are returning investors.
Calo is now valued at around $250 million, according to multiple sources TechCrunch spoke to.
The startup, which operates in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Bahrain, enables users to choose healthier ready meals, including breakfast, lunch, dinner and a snack – offering meal filters such as balanced , high protein, low carb. and vegetarian. Users can customize their meals and plans and even skip days.
The approach has created momentum in the region: This year Calo says it has served 10 million meals, with the average cost of a meal ranging from $7 to $9.
Beyond the Series B round, Calo said it aims to close an additional $25 million round by the first quarter of 2025 and has a goal of going public in the coming years. So this could be the last tranche of funding before the company is listed in Saudi Arabia. (With the Series B close, Calo has raised a total of $51 million in multiple rounds.)
“It’s a powerful idea to offer ready-to-eat meals that are nutritious, healthy and tailored to your needs,” Khaled Talhouni, managing partner at Nuwa Capital, told TechCrunch. “Whether you want to build muscle or lose weight, Calo helps you personalize meals, and we’re excited about the idea.”
“The GCC (Gulf Cooperation Council) market has an inherent tendency to order food. This is why companies like Talabat and Deliveroo are successful. Plus, Calo’s logistics model, which is like a bulk milk track, puts them in an advantageous position,” he added.
Calo was launched in Bahrain by Ahmed Al Rawi in 2019. Before that, Al Rawi built another startup for people to book sports seats and join live games. Later, he advised startups in New York before starting Calo.
“Before building the startup, I thought there wasn’t much to do in food delivery as startups like Careem already existed. But I realized that a segment of customers wanted customized meals with specific calorie counts or ingredients, and the incumbents weren’t offering that level of customization,” Al Rawi told TechCrunch during a call.
He noted that services existed to provide meal recommendations based on a person’s height, weight, age, gender and activity, but they didn’t offer actual meals, which wasn’t ideal for busy professionals – so Al Rawi discovered an opportunity for more personalized catering.
According to Calo, people are buying 30% more meals on his service versus an on-demand food aggregator (eg Careem). He credits this climb to combining the convenience of meal delivery with saving its customers the hassle of finding the right dish to meet their health goals.
The company operates a central kitchen for each city, using vans to make deliveries across cities with the help of smaller vans and individual riders. According to Al Rawi, Calo currently has 200 vans moving around the Middle East.
Customers receive their meals in a cold state, which they can heat up in the microwave or using a pan on their stove. The startup said it has been able to keep its operations fast and lean by not having too many distribution centers and sticking to scheduled deliveries.
The guide of the future
In addition to opening the new segments mentioned above, Calo plans to introduce even deeper customization for users – where they will, for example, be able to specify the exact amount of protein, carbohydrates or fat they want in a meal , or remove an ingredient.
The startup is also experimenting with new business models, such as retail food kiosks in places like corporate offices, and an on-demand delivery service.
Currently, Saudi Arabia represents 70% of Calo’s revenue, with the United Arab Emirates coming in second at 15%. However, Al Rawi told us that he expects the UAE to grow exponentially in the coming years.
This year, Calo reached nine figures in annual revenue and goes into almost a reduced state. The company aims to reach profitability by next year, before going public.
“Because we are capital efficient, we didn’t need to raise money and would have grown organically. But we saw new growth opportunities. So we mainly raised money to expand our business models, cater to more segments and also open up new geographies we serve,” added Al Rawi.
