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Egyptian cloud kitchen provider ,The Food Lab, secures $4.5M pre-seed for expansion

The Food Lab, an Egyptian startup that provides cloud technology for the food and beverages industry in Egypt has secured $4.5 million in pre-seed financing, marking its first venture round following two years of bootstrapping.

The round was led by Africa-focused fund 4DX Ventures and UAE-based venture capital firms Nuwa Capital and Shorooq Partners . Other participating investors include Al Faisaliah Group and Samurai Incubate.

According to its founders, this pre-seed investment will allow the company to further expand in the country and lay the foundation for entry into the Middle East and sub-Saharan Africa.

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El Daly company’s founder and president told TechCrunch. “Many things have changed within the ecosystem over the past decade in the space. We wanted to bridge the gap between the restaurants and the customers, help them expand, grow and operate seamlessly through technology and a shared economy model.”

“If a restaurant is finding it difficult to expand, maybe due to money issues and low margins, they can come into one of our cloud kitchens all around Cairo. We will operate everything end-to-end from procurement to delivery for them, said co-founder and CEO Osman to TechCrunch.

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“Also, one of the biggest problems that we see in the F&B space, especially with the supply chain changes, is the prices of the ingredients are extremely volatile. So another thing we do for them is procuring items in bulk from our supplier list and provide to them.”

The Food Lab’s virtual brand consultant , essentially a data-centric dashboard powered by machine learning ,democratizes data and provides granular information to these brands regarding their operations and finances. Other information includes menu reengineering, marketing, profitability margins, customer segmentation and buyer persona classification.

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The Egyptian cloud kitchen provider says that its platform allows “existing restaurant owners to grow exponentially and new brands to go from concept to launch within just 10 days.”

“What we want to do is to be that connector; we want to connect that closest cuisine or closest kitchen to the farthest appetites. Cloud kitchens may be the one thing we’re starting with and doing some procurement, but we’re an infrastructure play,” said Osman.

“We try to embed ourselves in a way that we help restaurants grow. If they have issues, we’re using our technology platform and our knowledge to help them do that and remove all those barriers. That’s really what we’re trying to do.”

There’s a growing need for cloud kitchens in emerging markets because of the apparent cost advantages of working out of a shared kitchen environment, particularly as food delivery services are in greater demand now than ever.

“First thing is to completely take over the Egyptian market, especially in Cairo or some key governorates that we want to have a strong footprint. So this is the geographical expansion part,” said El Daly, who is the company’s founder and president.

“Other than that, we have hiring plans for some community roles and operational positions. And the third thing is for us to develop further our technology solutions for our customers, partners and customers.”

The Food Lab was launched in 2020 by El Daly and his co-founders Ahmed Osman and Wesam Masoud  with one kitchen and opened another location last year.Siince its launch, its orders grew 10x, and revenues since inception have increased by 60x.More than 50 restaurants and food brands use The Food Lab, and 175,00 end customers have made orders from its kitchens, the company said. These clients are charged a percentage of their revenues, including aggregation, marketing and procurement fees. The Food Lab’s revenues have been growing 25-35% month-on-month as a result.

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