Food delivery service Calo wins $39 million in Series B expansion as it looks to the UK

Middle Eastern food delivery startup Karo said Tuesday it raised $39 million in a Series B expansion led by Al Jazilla Capital. More than 1.5 times the original $25 million salary increase in December also saw participation from existing supporters such as Nuwa Capital, STV, Khwarizmi Ventures and Al Faisaliah Group.

The company uses this fund to expand into regions like the UK and explore a range of partnerships in physical spaces.

Karo mainly offers ready-to-eat meals that customers can heat up later. The company offers a variety of plans to meet different health goals. The company’s founder, Ahmed Al Rawi, told TechCrunch that the startup’s revenues had risen “nearly 100%.” Last year, Karo served more than 10 million meals in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Bahrain. Although Al Rawi did not provide a number for this year, he said the delivery is growing gradually with revenue.

These numbers, along with its brand, technology and operational excellence, have convinced the Al Jazilla capital to invest in a Saudi company. “Calo represents an attractive opportunity at the intersection of HealthTech, FoodTech and Consumer Subscription models,” Rawan Alrasheed, director of venture capital at Aljazira Capital, told TechCrunch in a statement.

The startup is also expanding in the UK. Last year they acquired two meal delivery services, Fresh Fitness Food and Detox Kitchen. According to CrunchBase data, Fresh Fitness Food did not raise funds, but Detox Kitchen raised more than $3.4 million by combining ventureback and equity crowdfunding rounds.

“We spoke to over 50 meal subscription businesses around the world from the US to Asia in 2023-24. We learned what is an exciting market for us to expand, and we realized that the UK is the right market for us to expand.

He added that Karo acquired these businesses because he knew the operational tier, and that the startup wanted to upscale the technology and branding tier.

Al Rawi said Calo spent most of the year integrating its technology and process with both UK platforms without laying off existing personnel. The startup finished its integration work in July and is slowly moving forward with marketing in the UK.

Karo currently can serve meals 2-3 times a week in London and other parts of the UK every day. The founder said Calo’s goal is to earn 10 times more revenue in the UK over the next three years.

These British ambitions are full of competition. Apart from traditional food delivery giants like just meals and delivery, Karo also competes with meal box services such as Gusto and Wicked Kitchen.

Karo is focused on growing in the UK, but the company also aims to acquire a variety of meal kit services around the world. The company is also expanding its physical locations, including retail stores and kiosks in other regions. The company is also partnering with a gym chain called Saudi Arabia’s Armah Sports Company to offer a bundle of Karo and gym subscriptions.