Middle Eastern startup Calo has secured significant funding as it aims to broaden its offerings of customised ready-to-eat meals, catering to the needs of busy customers.
The meal delivery market in the Middle East is projected to reach $11.2 billion by 2030, as reported by MarkNtel Advisors in a report from last year. Leading food aggregators like Careem, Deliveroo, and Talabat have established themselves by catering to busy professionals who prefer ordering food rather than cooking, a trend significantly accelerated by the COVID-19 pandemic.
Calo, based in Riyadh, sets itself apart with customised meal subscriptions aimed at specific needs, including weight loss, high-protein diets, and balanced meals. This service targets consumers who prioritise the quality of their food rather than just the convenience of delivery.
The startup intends to expand its meal customisation options to accommodate various dietary requirements, including plans for muscle gain or meals designed for those managing diabetes, IBS (Irritable Bowel Syndrome), or PCOS (Polycystic Ovary Syndrome). Calo believes that customers with specific dietary needs are willing to invest in personalised meal options that fit their lifestyle.
Calo’s confidence in its business model is reflected in its plans to acquire a mystery food startup in the U.K. next year, marking its intention to extend its reach beyond the Middle East with ambitions for global expansion.
To support its growth initiatives, Calo has raised $25 million in a Series B funding round led by Nuwa Capital, with contributions from Khwarizm Ventures and STV. Remarkably, all these investors are returning supporters.
Calo’s current valuation stands at approximately $250 million, according to multiple sources consulted by StartupSuperb.
Active in Saudi Arabia, UAE, Kuwait, Qatar, and Bahrain, Calo provides users access to a selection of healthier ready meals such as breakfast, lunch, dinner, and snacks. Customers can filter for options like balanced, high protein, low carb, and vegetarian dishes. Additionally, users have the flexibility to customise their meal plans and can skip days as needed.
The approach has gained traction in the region, as Calo reports serving 10 million meals this year, with meal prices typically ranging from $7 to $9.
Looking ahead, Calo aims to secure an additional $25 million in an extension round by Q1 2025 and has set its sights on going public in the next few years. This could be its final funding segment before listing on the Saudi stock exchange. With this Series B round complete, Calo has successfully raised a total of $51 million across various funding rounds.
“Delivering nutritious, healthy, and customised ready-to-eat meals is a powerful concept,” stated Khaled Talhouni, managing partner at Nuwa Capital, in a conversation with StartupSuperb. “Calo offers personalised meals based on your goals, whether that’s muscle gain or weight loss, and this innovation truly excites us.”
“The GCC [Gulf Cooperation Council] market has a natural inclination towards ordering food. This preference accounts for the success of companies like Talabat and Deliveroo. Moreover, Calo’s logistics model, akin to bulk milk delivery, places it in a competitive advantage,” he added.
Calo was founded in Bahrain by Ahmed Al Rawi in 2019. Prior to launching Calo, Al Rawi created a startup that facilitated booking sports venues and joining ongoing games. He also provided advisory services to startups in New York before establishing Calo.
“Initially, I believed the food delivery sector was saturated with players like Careem. However, I recognised there was demand for customised meals with precise calorie counts and ingredients, which existing services did not adequately provide,” Al Rawi explained in an interview with StartupSuperb.
Al Rawi observed that while there were services offering meal recommendations based on individual metrics—such as height, weight, age, gender, and activity levels—these services did not provide meals, which posed a challenge for busy professionals. This realisation led him to identify a market opportunity for tailored meal delivery solutions.
Calo claims that users purchase 30% more meals through its platform compared to traditional on-demand food aggregators (e.g., Careem). This increased engagement is attributed to the combination of the convenience of meal delivery and the elimination of the hassle involved in selecting appropriate dishes to align with personal health objectives.
Calo operates a central kitchen in each city, utilising vans to facilitate deliveries across urban areas, supported by smaller vehicles and dedicated riders. Currently, Al Rawi reports that Calo has a fleet of 200 vans traversing the Middle East.
Meals are delivered to customers in a chilled format, allowing them to reheat their food using a microwave or stovetop. The startup has maintained efficiency by minimising the number of delivery centres and adhering to a schedule for deliveries.
Future Roadmap
Looking ahead, Calo aims to broaden its offerings by introducing refined personalisation features. Customers will have the flexibility to specify their preferred proportions of protein, carbohydrates, and fats in meals, or exclude certain ingredients altogether.
Additionally, the startup is exploring innovative business models, such as retail kiosks for convenient grab-and-go meals in locations like corporate offices, and an on-demand delivery service.
As it stands, Saudi Arabia generates 70% of Calo’s revenue, with the UAE contributing 15%. Al Rawi indicated that the UAE market is anticipated to experience significant growth in the coming years.
This year, Calo achieved annualised revenue in the nine-figure range and operates on the brink of break-even. The company has set a goal of reaching profitability by next year, prior to its planned initial public offering.
“Our capital efficiency meant we did not require external funding for growth, allowing us to expand organically. However, recognising new growth opportunities led us to raise capital to diversify our business models, cater to additional market segments, and explore new geographic regions,” added Al Rawi.