Dubai's GrubTech Raises $13 Million to Scale Its All-in-One Restaurant Operating System
Dubai-based tech company has built an operating system to help entrepreneurs adapt to the new local dining reality, driven by virtual dining and delivery apps
Dubai-based GrubTech wants to be a plug-and-play solution for dining entrepreneurs to allow them to offer multiple virtual dining concepts and integrate with multiple delivery aggregators. And they don’t just have designs on MENA. GrubTech is also targeting the African continent, Asia, and beyond.
To fuel its ambitions, GrubTech has just raised a $13 million Series A round. The round was led by Addition with BY Ventures and Hambro Perks Oryx Fund also participating.
The Series A round follows a $3.4 million pre-Series A funding round in March. At the time, GrubTech described its investors as “a large regional family offices, a US-based venture capital firm, as well as reputable angel investors.”
GrubTech was launched in 2019 to create a platform for restaurant operators to enter the virtual restaurant space without having to build their own technology.
"Legacy technology in the F&B space hasn't kept pace with the speed in which the sector is transforming. This results in a fragmented set of solutions that a restauranteur or cloud kitchen operator is forced to sift through and stitch up. Not only does this complicate their operation, but it also slows down their ability to expand. We fixed that with an easy-to-use, all-in-one stack that's future-proof," said Mohamed Al Fayed, GrubTech's Co-Founder & CEO.
Virtual restaurant and ghost (or cloud) kitchen are overlapping but not entirely interchangeable terms. A virtual restaurant is a restaurant that operates exclusively for delivery, with no physical location open to the public. A ghost kitchen is the “factory” that serves virtual restaurants. Some ghost kitchens own the brands they service, while some act as white-label platforms fulfilling for others’ virtual brands. A single ghost kitchen can service multiple virtual restaurant concepts.
Ghost kitchens also often support well-known brick and mortar restaurant operations, which either want to extend their delivery capacity for existing brands or create their own virtual food concepts.
We previously interviewed Al Fayed for the Big5D Podcast. In that interview, he talked about how the restaurant industry is increasingly omnichannel, with few pure-play digital or in-store or virtual operations anymore, at least in MENA.
“There is no such a thing as this is a Dedicated Cloud kitchen and this is a dedicated restaurant anymore, that the lines have totally been blurred,'“ Mohamed said in the interview.
He also emphasized how complex it is to build ghost kitchen software, which has to support multiple menu items across multiple brands, fulfilled via multiple delivery aggregators. And he admitted GrubTech’s V1 failed to fully appreciate this complexity. The difficultly in accounting for order modifiers (extra cheese, no onions, etc.) was particularly underestimated in the company’s early days.
“It was quite eye-opening for us. And to be quite honest with you, you know, our first stab at it, we failed miserably,” Moe said. “And it took a couple of tries and a lot of research and customer feedback to perfect it. And I'm proud to say that we got it right. It took some time, but we got it right.”
GrubTech plans to pour the Series A money into further beefing up its product and supporting new market expansion. GrubTech currently operates in 15 countries in the Middle East, Africa, Asia, and Europe.
Al Fayed will speak about the MENA online food and ghost kitchens scene at the upcoming BigFive Digital MENA Summit, 17th February 2022 in Dubai. You can purchase tickets to the event here. Tickets start at $50. Use the code SUBSTACK at checkout for 25% off.
GrubTech is positioning itself not just as an OS for cloud kitchens, but as a future-proof platform for all kinds of restaurants. To Mohamed’s point, the lines between IRL and virtual have permanently blurred.
As it describes its solution, GrubTech’s platform addresses “back-of-house, in kitchen operations, integrations with food aggregators and an omnichannel point of sale.”
Another GrubTech co-founder, Omar Rifai, said this broader positioning is being driven by the consumer.
"Consumers are demanding a technology-enabled experience when engaging with their favorite F&B brands, whether it's on-premise, take out, or online,” Rifai said. “GrubTech was built from the ground up to empower our clients to better serve their customers across multiple fronts."
This fits with the broader trend in small business technology where businesses are being pulled into adopting customer experience technology based on consumer expectations. As with most things, this was dramatically accelerated by the pandemic. But the trend well predated Covid.
What New in MENA’s Ghost Kitchen Space?
GrubTech’s raise comes during an active time for the region’s online food industry. Here is a quick rundown of recent developments and what they may signal about the future.