Cloud kitchens have pushed up investments in October after Kaykroo launched with a $4 million funding round and Sweetheart Kitchen announced a $17.7 million Series C which was backed by "strategic investors" and rather unusually, was led by its founder and CEO Peter Schatzberg. Given that Germany’s Delivery Hero owns 60 per cent of Sweetheart Kitchen in the UAE, Kuwait and Singapore and 100 per cent of its Saudi Arabia operations, we can deduce that the strategic investors will most likely have been Delivery Hero.
The online food delivery market, estimated to reach $1.1 billion in the UAE by the end of this year according to Statista, is pushing interest in the cloud kitchen space, which is one of the fastest growing sectors in foodtech.
All in all, the UAE accounted for almost 80 per cent of the $47.6 million raised by startups in the region. As the financial capital of the Middle East, large investment rounds are more common in the UAE, where there is a higher proportion of mature startups that require higher amounts of funding. This patternis likely to continue as many UAE-based startups look to expand to Saudi Arabia, a country that requires vast amounts of growth capital to scale.
Meanwhile Egypt and Tunisia led in number of deals (nine each). Tunisia’s investments were driven by the Flat6Labs accelerator graduates.
Out of the 28 deals in the region, fintech attracted the highest number of deals (eight) at a total value of $3,893,000 and accounted for a third of all the deals in Egypt.
E-commerce and marketplaces continue to attract investor interest raising $5.4 million while media and advertising was buoyed by Foxpush’s $15 million round.
Although the total amount invested has risen by more than 300 per cent since September, cheque sizes remain small with rounds focused on the pre-seed and seed stage.