The founder of Dubai-based online marketplace COFE has revealed the start-up could be taken public within the next five years.
The platform, which placed among the top five start-ups in the tech innovation category at the London Coffee Shop Innovation Expo, has grown from strength to strength since its official launch in November 2018, and this month completed a Series-B funding round, raising $10 million.
The financing was provided by Al Imtiaz Investment Group, a leading Kuwaiti investment house listed on the Boursa Kuwait.
Ali Al Ebrahim told Arabian Business: “We want to be the number one daily app for everything coffee, not on a regional level, on a global level. It’s a new concept, it’s a new business model we’re introducing and we’re hoping this can be used again in the States, in Latin America, in Asia, Europe and other markets.
“I think, five years from now, if we’re looking for an IPO, if we’re looking for a big growth rounds, [Al Imtiaz] are the right partner to take us. I think that’s one of the decisions why we went to Al Imtiaz already, who are stock exchange-listed, they understand how things roll especially on the next rounds to come.”
COFE offers users access to both international chains like Costa Coffee, Dunkin’, Coffee Bean & Tea Leaf, in addition to a host of specialty roasters. Its success has been spurred by changing consumer habits which have shown a steady shift towards online purchase and at-home brewing.
The company has previously gone to the market on two separate occasions since launch, raising around $3 million is different Series rounds. Investors have included: Al Mutlaq Group (Saudi Arabia), KISP Ventures (KFH Capital), Cedar Mundi (Lebanon), Arab Investments Company and Nizar Al Nusif Sons Holding (both Kuwait), Dividend Gate Capital and Takamul Capital (both Bahrain) and Towell International Holding (Oman).
The latest injection of funds will be used to expand the company in its core countries, Kuwait, the UAE and Saudi Arabia, as well as building on successful soft launches in London, Egypt and Morocco.
“We are ready now to scale to any city in two-to-three weeks. We can support the language the geo-location, the payment solution, all of that is already there,” said Al Ebrahim.
Coffee and tea are the second most popular beverages in the world behind water, with the global coffee market currently valued at $380 billion and the MENA region alone accounting for $44bn of that figure.
In 2017, Swiss food giant Nestle bought a majority stake in Blue Bottle Coffee, which valued the company at more than $700 million.
Ali Al Ebrahim, founder of Dubai-based online marketplace COFE
The following year, Nestle bought control of Starbucks’ retail arm for $7.15 billion; while the same year Coca-Cola agreed to buy coffee chain Costa Coffee from UK drinks and hotels group Whitbread for $5.1 billion. And last year Netherlands-based Peet’s Coffee completed an IPO raising over $2.5 billion.
“In the beginning, to raise funds it was very difficult to explain it, but during the journey, seeing all these deals and the reports, it gave us a strong point for the assumptions that we had,” said Al Ebrahim.
“It gives you a sense that when there is a financial crisis, or the global pandemic that we face, people will still drink their coffee either at home or at the coffee shop. It is a market with huge potential,” he added.
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