Arabic Coffee and Digital Disruption with COFE App

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One of the most exciting disruptions across Emerging Venture Markets is equipping the traditional with Tech to create tailored hyperlocalized consumer experiences. One Pakistan-based startup, Oraan, has digitized the long-standing community tradition of ROSCA: a community capital pool that everyone can access for credit in the case they need it. By adding a layer of seamless Tech, the women-led startup was able to provide a nationwide with much more intricate credit and micro-credit solutions. Earlier this year, Oraan raised an unprecedented $3M in SEED funding backed by global players like Zayn Capital, Wavemaker Partners, and i2i Ventures in a promising sign for digital/traditional disruptions. 

One of the thriving startups capitalizing on long-lived traditions is COFE App, harnessing MENA’s love for coffee to disrupt a burgeoning F&B sector. In 2021, the F&B industry in MENA has observed a 295% YoY growth in funding largely attributed to Kitopi’s $415M Megadeal earlier this year. However, excluding the Kitopi deal, the F&B sector in MENA has raised $6M less than funding capital backing the industry in 2020. As Ali Al Ebrahim Founder/CEO COFE App elaborates on how q-commerce, E-commerce, and F&B industries have geared up this year, here’s his reflections on a highly in-demand commodity like coffee paying out in a rapidly digitizing region: 


Your Very Own Online Coffee Marketplace, check out the Cofe App


For centuries, coffee has been at the heart of Middle Eastern culture. A symbol of togetherness, community, and hospitality, the great Middle Eastern coffee culture is gracefully easing its way into the world of high tech across the region.  As we have witnessed at Cofe App, the pandemic has seen a boom in coffee, the one small pleasure we all wanted to hang onto during the uncertainty of Covid-19. With that, came a rapid and radical evolution in the way we both consume and buy coffee, witnessed firsthand in the world of specialist marketplaces like ours. 

As we have observed, the Gulf is a leader in such developments - Saudi Arabia the market leader for 2019-20 while the UAE, Bahrain, Kuwait, and Qatar experiencing double-digit growth in food delivery revenue. As Cofe expands to Turkey and Egypt, we can see this wave spreading rapidly elsewhere. These areas have the infrastructure and clientele who are savvy but busy, who want the instant gratification of their favorite food and drinks with the convenience of everything high-tech offers. In some places, adoption has been hampered by the low penetration rates while in others, as we are seeing with Turkey and Egypt, they are blending seamlessly into the retail space. Yet. as competition increases, the challenges to this digital growth are reducing. Delivery costs in the UAE for example are among the lowest in the region due to the mass penetration of players while on-demand delivery startup Mrsool charges a higher-order price and delivery fee in Egypt and Saudi Arabia than other players, reaching as high as US$5.7 per order in Saudi Arabia. Despite this, Mrsool’s growth in Saudi was five times the 2019 revenue in 2020 proving that things are moving fast as the market grows. 


From the brewery to your desk, your very own Coffee Marketplace. 


For Egypt’s 100m population, almost everything from a cup of coffee to a blood test can be ordered by a phone call and the potential there for digital alternatives is still huge and untapped. There too, the pandemic gave rise to a new wave of food consumption. Around six percent of food orders are made online there now and this is growing year on year. As reported by Bloomberg, online delivery app Elmenus, which has about 20% of the Egyptian market, saw revenue triple last year as the pandemic spurred more restaurants to outsource deliveries. It is expecting ten-fold growth in 2021. 

Confidence in the market has been reflected in Turkey too. Delivery Hero’s acquisition of food delivery platform Yemeksepti for $589m was the largest acquisition at the time in the online food ordering space and offered a boon to the Turkish startup ecosystem. Today, Yemeksepeti remains the company’s only Turkish asset and one of the leading food delivery brands in the market. 

However, additionally, Istanbul-headquartered grocery delivery startup Getir has become a unicorn, tripling its valuation to $2.6 billion in less than two months with a $300 million Series C, co-led by Sequoia Capital and returning investor Tiger Global and now deemed the most valuable startup in the Middle East, North Africa, Turkey, and Pakistan. Only the second Turkish startup to have achieved unicorn status after Peak Games, reflecting the strength of the market. 

 

Coffee is just the latest in a long line of innovative new commodities set to boom from this rising trend. The global coffee market is valued at $380 billion, with the MENA region accounting for $44 billion, which gives a significant opportunity for us as Cofe to expand and capitalize on these trends.

The future of coffee in the region continues to look bright. In Saudi, Badr Al Saud, the Minister of Culture and the Governor of the Royal Commission for AlUla has designated 2022 as the ‘Year of Saudi Coffee’. An extensive 12-month program of events and activities will celebrate this iconic symbol of Saudi Arabia’s culture and hospitality.

With such strong statements showing coffee remains at the heart of the region’s culture and economy, the year 2022 looks brighter than ever.
 

 


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