UAE-based online coffee marketplace Cofe has raised $15 million in a new funding round as the company aims to expand its operations in new markets.
The latest funding round was led by Waed Ventures, the $500 million Saudi-focused venture capital fund wholly owned by Aramco, and eWTP Arabia Capital, which was founded by Chinese entrepreneur Jerry Li.
Other investors include Al Imtiaz Investment Group, KISP Ventures and Rasameel Investment Company, a Kuwait-based wealth management fund.
Following the new funding round, the company said it will focus on strengthening its e-commerce offerings, boosting its position in the regional market and expanding internationally in the near future.
“Cofe’s story has been one of resilience. We have had some great opportunities, but not without its challenges that have needed innovative manoeuvring,” Ali Al Ebrahim, founder and chief executive of the company, said.
“We have persevered in our ambition to create a fertile breeding ground for the growth of the entire coffee ecosystem.”
Founded in 2018, Cofe is an online marketplace for coffee and all related accessories. The app allows users to order coffee, capsules, beans, coffee machines and associated products from shops or vendors hosted on its platform.
It acquired the UAE-based coffee marketplace Sippy Beans in 2021 as it sought to widen its offerings. In March last year, it acquired the Saudi Arabian app Kaffeen for an undisclosed sum in a move to consolidate its presence across the region.
“The founding team at Cofe app, supported by its cutting-edge platform, will disrupt a multi-billion-dollar market fuelled by a nationwide initiative supporting its growth for years to come,” Fahad Alidi, managing director at Waed Ventures, said.
“We look forward to backing Cofe’s growth as it continues to lead the digitalisation of farm-to-cup consumerism across the region.”
Cofe, which entered Saudi Arabia — the Arab world’s biggest economy — in 2020, has seen widespread acceptance from users in the kingdom.
It was listed as one of the top 10 most downloaded food delivery and restaurant apps (2021) in the kingdom in a survey conducted by the Communication and Information Technology Commission of Saudi Arabia.
It has also partnered with the Saudi Coffee Company, established by the kingdom’s sovereign wealth fund, the Public Investment Fund.
The SCC plans over the next 10 years to invest nearly 1.2 billion Saudi riyals ($320 million) in the national coffee industry, with the goal of boosting the country’s production from 300 tonnes per year to 2,500 tonnes per year.
“We partner with like-minded entrepreneurs and support the growth of promising businesses in the GCC region. We believe our investment, combined with strategic assistance, will provide Cofe with resources to scale and grow,” Mr Li, founder and managing partner of eWTP Arabia Capital, said.
The global coffee market was valued at $102 billion in 2020 and is projected to grow at a compound annual growth rate of 4.28 per cent between 2021 and 2026, a report by ResearchAndMarkets.com showed.
Meanwhile, the coffee market in the Middle East and North Africa region is set to grow at a compound annual growth rate of 7.5 per cent between 2020 and 2025, according to a report by Mordor Intelligence.
Al Imtiaz Investment Group, which is listed on the Boursa Kuwait, is Cofe’s largest investor by contribution. Having invested $10 million in the previous round, it invested $1 million this time around, taking its total investment in Cofe to $11 million.