Middle Eastern meal delivery startup Calo has secured $25 million in Series B funding, led by Nuwa Capital, with participation from Khwarizm Ventures and STV. This investment brings the company's valuation to around $250 million, according to multiple sources. The funding will be used to expand Calo's services, including meal customization options, and its geographic footprint, with plans to acquire a UK-based food startup next year.

The meal delivery market in the Middle East is expected to hit $11.2 billion by 2030, according to a report from MarkNtel Advisors. Food aggregators such as Careem, Deliveroo, and Talabat have built successful businesses by catering to the habits of busy professionals ordering food online. However, Calo differentiates itself by offering customized meal subscriptions for specialized segments, such as weight loss, high protein intake, or balanced meals, targeting customers who prioritize healthy eating.

Calo's approach has gained momentum in the region, with the company serving 10 million meals this year, and the average cost of a meal ranging from $7 to $9. The startup operates in Saudi Arabia, UAE, Kuwait, Qatar, and Bahrain, allowing users to pick healthier ready meals, including breakfast, lunch, dinner, and snacks, with meal filters such as balanced, high protein, low carb, and vegetarian. Users can customize their meals and plans, and even skip days.

The company plans to further lean into meal customization, catering to more personalized segments and food needs, such as meals geared towards those seeking muscle gain, or suffering from diabetes, IBS, or PCOS. Calo's premise is that people who fall into these categories will pay a premium for food customization features that meet their convenience needs.

Khaled Talhouni, managing partner at Nuwa Capital, expressed his excitement about Calo's concept, stating, "It is a powerful idea to deliver ready-to-eat meals that are nutritious, healthy, and customized to your needs... Whether you want to build muscle or lose weight, Calo helps you personalize meals, and that idea has us excited."

Calo's founder, Ahmed Al Rawi, started the company in Bahrain in 2019, after realizing that a segment of customers wanted customized meals with specific calorie counts or ingredients, which incumbent food delivery services didn't offer. Al Rawi noted that services existed to provide meal recommendations based on a person's height, weight, age, gender, and activity, but they didn't provide actual meals, which wasn't ideal for busy professionals.

According to Calo, people are buying 30% more meals on its service compared to an on-demand food aggregator, crediting this stickiness to combining meal delivery convenience with saving customers the hassle of finding the right dish to meet their health goals. The company operates one central kitchen per city, using vans to make deliveries across cities, and has 200 vans driving across the Middle East.

In addition to expanding its meal customization options, Calo plans to introduce new business models, such as retail kiosks for grab-and-go meals in corporate offices, and an on-demand delivery service. The startup aims to reach profitability by next year, ahead of going public, and expects the UAE to grow exponentially in the coming years.

Saudi Arabia currently represents 70% of Calo's revenues, with UAE coming second at 15%. The company hit nine figures in annualized revenue this year and runs at a nearly break-even state. Al Rawi stated that the company didn't need to raise money and grow organically, but saw new growth opportunities, which prompted the funding round.

With its Series B funding in place, Calo is poised to continue its growth trajectory, offering customers more personalized and healthy meal options, while expanding its presence in the Middle East and beyond.