Egypt’s food delivery business is worth almost $2.5 billion, says entrepreneur David Buttress who recently invested in Elmenus, an online food discovery and ordering company operating in Cairo and other cities in Egypt.
Only six per cent of such orders are done through online ordering at present, with the rest being done by phone. Elmenus has a 20 per cent share of the online orders, Buttress, also a board member of the company, added.
The Egyptian market is comparable in size to markets like South Africa and Turkey, where the food delivery market is worth $2.8 billion and $3 billion, respectively, Buttress said. Around 25 per cent of Turkish food orders are now placed online, he said, adding that he thinks Egypt will go in the same direction.
The UK market went from zero to 60 per cent food delivery orders online over the past 15 years, he said.
Buttress said he was looking forward to watching the food technology market mature in Egypt in the coming few years.
Covid-19 has had a role to play in accelerating migration to online ordering, he added, saying that Elmenus had seen higher growth in the second half of 2020 because of Covid-19 and the pandemic had “accelerated the growth of the industry globally”.
He does not expect that growth to slow down when the pandemic is over either, adding that the migration of consumers from telephone to online will not be reversed.
Buttress has been in the industry for 15 years. In 2006, he joined Just Eat, an online food-ordering and delivery service headquartered in London, to help launch its UK business. He led Just Eat in making global acquisitions and investments including MenuLog in Australia and a majority stake in Brazil’s iFood.
Buttress has been in venture capital over the last four years investing in Europe, the US and Latin America. While he would not disclose the amount of his investment in Elmenus, he said it was the biggest personal cheque he had ever written to any company. The amount would be disclosed later, he said.
Elmenus began as a comprehensive directory providing users with menus and information about restaurants in Cairo. It launched its online ordering service in late 2018, and since then it has grown its revenues by 300 per cent, all with less than $10 million in funding, a company press release said.
The funding included a Series B funding round that raised $8 million led by UAE-based venture-capital firms Global Ventures and Algebra Ventures.
Series A investments are the first round of investment for a company and usually range around $5 million. Series B are the second round of investment, usually raising between $5 and $15 million, while Series C are the later stage of equity investment usually raising more than $15 million. Buttress said that as a private investor he tends to invest in Series C companies.
Elmenus was targeting all consumers, according to Buttress. While the younger generation are digital natives, almost everyone has now got used to using smart phones and applications, he said.
The company plans to spread further across the country. While the major metropolitan areas are the first focus, it will also expand to other governorates.
One of the keys of the company’s success was having a local founding team, Buttress said, and another was specialisation. Elmenus specialises in food, and does not try to offer multiple services. It also has Egypt as a priority market unlike other applications that may have other markets as their priority.
For Buttress, it is too early to think about offering shares in the company on the stock market, and he is focused on building the best business possible. The company was working hard to sign up the best restaurants and building the brand and application, he said.
“If we do a good job, we will build a company that Egypt can be proud of as a technology company,” Buttress concluded.
*A version of this article appears in print in the 11 February , 2021 edition of Al-Ahram Weekly