LUNCH:ON Closes $3 Million Investment in First Close of Series A Financing
To read LUNCH:ON's founders insights about their recent Series A funding, scroll below the press release
PRESS RELEASE
17 February 2019 – LUNCH:ON (www.lunchon.ae), the UAE’s rapidly growing food tech startup focused on solving the problem of food at work, announced that it has closed $3 million in equity financing. This marks the first closing of its Series A round which will help accelerate the company’s growth, expand its presence across the UAE and begin its expansion into Saudi Arabia. The round was led by Wamda Capital, with EATventure, Arzan VC, Abu Nayyan Holding, Dubai Angel Investors, Aljammaz Group and other investors participating in the round. “We are very pleased with LUNCH:ON's continued success and we believe that this latest round will allow the company to expand its geographic footprint as well as venture into new offerings that will help redefine the food space,” said Khaled Talhouni, Managing Partner at Wamda Capital.
LUNCH:ON, co-founded by Mohammad Al Zaben and Dana Baki in 2016, operates much like a virtual canteen for companies. The company partners with top local restaurants to offer corporates and their employees curated meals, delivered to the office, at discounted prices. With its LUNCH:ON Pro subscription, customers can get their daily lunch for a fixed price of 25 AED. Employees in each office receive a curated menu from 3 different restaurants daily, based on the preferences and ordering patterns of the customers in that office. They then simply need to place their order by 11:30 am and a delicious lunch of their choice is delivered to their office for 25 AED with free delivery.
With LUNCH:ON, employees no longer have to waste time deciding where and what to eat every day and no longer have to pay the high prices associated with food delivery. “LUNCH:ON, in essence, serves as your company’s food partner, and creates a win-win for both customers and restaurants,” added Dana Baki, “By consolidating orders by office buildings, and delivering to the same place at the same time, we are able to eliminate delivery fees and negotiate better pricing with restaurant partners. These savings are passed on to our customers, offering them a greater selection of meals at just 25 AED.”
Technology is at the core of the company’s success, and will continue to be a key focus for the company as it looks to scale its operations into new markets. “The reality is that coordinating thousands of lunch deliveries to countless office locations from restaurants all over the city, all within a 30-minute window, would not be possible without strong tech,” added Mohammad Al Zaben. The company's 13-person strong engineering team has developed innovative platforms that ensure the optimal pairing of companies and restaurants. “A key component is our prediction software and scheduling algorithms that factor in user preferences and ordering patterns, bringing together restaurants and hungry people like peanut butter and jelly.”
Additionally, LUNCH:ON has launched a new catering portal to address companies' corporate catering headaches. With LUNCH:ON Catering, companies can order food for any type of event – from simple sandwiches for a team meeting, a lunch buffet to impress a client, a cake for an office celebration, to a full banquet setup for conferences and other events – within minutes and with the help of a free Catering Concierge. Again, customers here benefit from pricing that is less than or equal to the pricing offered directly by the caterer, but with a bespoke service and one point of contact, to ensure the right options are presented to fit any budget and occasion.
The value proposition has not gone unnoticed by both customers and restaurants. Despite increased competition in the region’s food delivery landscape, the company has seen dynamic growth with its unique offering, and has expansion plans for Saudi Arabia and other markets.
For more information, please visit www.lunchon.ae
Below, we give some MAGNiTT exclusive insights from LUNCH:ON co-founders Dana Baki and Mohammad Al Zaben on their Series A fundraise:
What are the funds going to be used for as part of your growth strategy?
We’ve been overwhelmed and thrilled by the response LUNCH:ON has received from both customers and restaurants. However, looking at the size of the opportunity in the region, we've barely scratched the surface. This new round of funding will go towards raising consumer awareness and scaling customer acquisition across the UAE. In addition, we plan to launch the service in KSA very soon.
This is now a follow on from a previous investment round. What was the biggest difference between your Seed round and your Series A round when speaking with investors?
Each round has its own set of challenges but what I can say is that you get a lot more leeway with investors in your Seed round. With early traction, a lot of your growth assumptions are still being tested and so an investment decision will likely come down to whether they like the space and the team. In a Series A round, you need to have a very good grasp of your numbers and be able to back your growth assumptions with real data. At this stage, investors want to really understand the quality of your growth, in addition to all the key drivers of your business and how they will evolve over time.
The food delivery market continues to heat up with exits and funding announcements. What are your predictions for the industry in 2019?
I believe we’ll continue to see activity in this space. I can see at least two of the larger players in the US or Europe going public. Right now, there’s only a handful of food delivery companies on the public market (i.e. Grubhub, Just Eat, etc…) and given how fast things are moving, there is plenty of investor appetite.
What makes LUNCH:ON uniquely positioned to compete with other players in the market
As a company we are capitalizing on rapidly-changing food ordering habits and customer demands. We've cracked a model that takes order consolidation to the next level and utilizes the restaurants excess capacity to provide working professionals with a curated offering at a much cheaper price point. This is the premise on which Lunch:on is built, and it is what makes it advantageous for customers and restaurant partners.
We have more recently launched our Catering a platform that gives office admins a simple way to get catered food for their internal meetings and events. Companies are now able to order platters, plan food for any kind of event or order the traditional LUNCH:ON boxed meals for their teams, with just a few clicks. This part of the business has taken off quite nicely, as we have learned that corporate catering is a huge pain point for those involved.