The Food Lab, an Egyptian cloud kitchen provider, raises $4.5M pre-seed for expansion

Per reports, Egyptians spend about 30% of their income on food in a $17 billion restaurant industry, one of the largest in Africa and the Middle East. Yet restaurants in this North African nation operate on thin margins due to several factors, ranging from large initial investments and high cost of rent to increasing operating expenses and commissions charged by aggregators.

Kareem El Daly stumbled upon these issues when venturing to start a restaurant with his wife. Being an enthusiast of the food tech space, El Daly began to explore market gaps and saw an opportunity in using technology to help restaurants and food brands make a return on investment while maintaining their quality of service.

“Many things have changed within the ecosystem over the past decade in the space,” El Daly told TechCrunch. “We wanted to bridge the gap between the restaurants and the customers, help them expand, grow and operate seamlessly through technology and a shared economy model.”

The Food Lab was the resulting solution El Daly and his co-founders Ahmed Osman and Wesam Masoud launched in 2020. Following two years of bootstrapping, the company has raised $4.5 million in pre-seed financing — its first venture round.

Africa-focused fund 4DX Ventures and UAE-based venture capital firms Nuwa Capital and Shorooq Partners led the round, one of the largest in Egypt after Rabbit, Telda and Milezmore. Other participating investors include Al Faisaliah Group and Samurai Incubate.

The Food Lab is a cloud kitchen platform but describes itself as an infrastructure company for restaurants in Egypt — about 400,000 in number — in the food & beverage (F&B) space. The company provides a full suite of end-to-end services, including cloud kitchen (kitchen as a service) and procurement.

“If a restaurant is finding it difficult to expand, maybe due to money issues and low margins, they can come into one of our cloud kitchens all around Cairo. We will operate everything end-to-end from procurement to delivery for them, said co-founder and CEO Osman to TechCrunch.