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Saudi Arabia’s macro-economics are compelling. They tell a story of a large population of young, tech-savvy Saudis with strong purchasing power, hungry for the latest consumer technologies. With 98% internet penetration across the country, 97% of Saudis owning smartphones, and 69% of the population regularly using e-payment solutions, the country does seem ripe for consumer-tech startups to sweep up a strong user-base.
Image courtesy Lucidity Insights.
Take Jahez, for example, Saudi Arabia’s online food-delivery unicorn, who successfully listed on Saudi’s secondary market, Nomu, raising a US$2.4 billion initial public offering (IPO) in 2022. Jahez achieved this stellar exit within five years of establishing itself, while delivering a cumulative 100 million meals to Saudi customers through 19,900 merchants and 52,400 delivery partners. A year prior to IPO-ing, the food-delivery startup grew from serving 22 cities to serving 47 cities, capturing 28% of the country’s food delivery market share. In March 2021, the company served over 1.3 million customers. 15 months later, Jahez’s consumer-base had grown 67% to serve 2.4 million customers.
Impact46, a Riyadh-based venture capital firm, raised a single asset fund for Jahez’s IPO amounting to $37 million. Founding Partner of IMPACT46, Abdulaziz Alomran, has this to say about this listing: “While Impact46 impacted Jahez’s IPO, marking the first tech startup backed by venture capital (VC) to go public, the much-anticipated IPO move also set an important precedent that will widen the entry funnel of startups listing in the Kingdom. Jahez’s pioneering IPO has positioned the Saudi market as a leader in the region, taking the ecosystem to a new horizon.”
Image courtesy Lucidity Insights.
Jahez’s growth story has continued since listing on 5 January 2022. At the end of Q2 2022, revenue had grown by 1.6x, and Jahez had witnessed a 46% growth in the number of orders being placed, from H1 2021 figures. The company also posted an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) profit of SAR83 million (equivalent to $22.1 million), and it is poised to finish the 2022 financial year with over $40 million in profits to continue funding its market dominance, in a market that is conservatively forecasted to be valued at US$2.8 billion by 2025.
Image courtesy Lucidity Insights.
When we spoke to various stakeholders aware of Jahez’s future growth plans, we learned that Jahez has no plans of slowing down. It is working hard to grow its presence to additional cities, and adding more merchants to serve a growing number of consumers across the country. As of July 2022, Jahez had hit a precious milestone of fulfilling over 100 million cumulative orders since inception. As a locally-owned food delivery platform enabling merchants to reach more customers, the platform is investing in providing an increasingly user-centric experience that will continue to delight customers with convenience, and support the development of local communities through continuous technological innovation. Jahez is poised to accelerate its strategy, and no doubt contribute to the prosperity of the promising tech sectors in the Kingdom as well as across the region.
Learn more about Saudi Arabia’s successful and emerging startups by checking out the report, The Evolution of Saudi Arabia’s Startup Ecosystem 2010-2022.
This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa’s tech and entrepreneurial ecosystems.
This article is from Entrepreneur.com
