Calo Raises $39M Series B Extension for UK Expansion

Calo Secures $39 Million in Series B Extension

Calo, a Middle Eastern food delivery company, announced Tuesday that it has successfully raised $39 million in a Series B extension funding round. Aljazira Capital spearheaded the investment.

This funding round surpassed the initial target of $25 million, which was secured in December. Existing investors, including Nuwa Capital, STV, Khwarizmi Ventures, and Al Faisaliah Group, also participated in this latest financing effort.

Expansion Plans and Strategic Partnerships

The newly acquired capital will be strategically deployed to facilitate expansion into new territories, notably the U.K. Furthermore, Calo intends to forge various partnerships focused on establishing a physical presence.

Calo specializes in providing customers with ready-to-eat meals designed for convenient heating and consumption. The company offers diverse meal plans tailored to meet a range of individual health and wellness objectives.

Significant Revenue Growth and Meal Deliveries

According to Ahmed Al Rawi, Calo’s founder, the startup experienced revenue growth of nearly 100%. Last year, the company successfully delivered over 10 million meals across Saudi Arabia, the UAE, Kuwait, Qatar, and Bahrain.

While specific figures for the current year were not disclosed, Al Rawi confirmed that delivery numbers are increasing in proportion to revenue growth.

Investment Rationale

Aljazira Capital’s decision to invest was influenced by Calo’s strong brand recognition, advanced technology, and demonstrated operational efficiency. Rawan AlRasheed, Director of Venture Capital at Aljazira Capital, highlighted Calo as a “compelling opportunity” at the convergence of healthtech, foodtech, and subscription-based consumer models.

U.K. Market Entry Through Acquisitions

Calo is actively expanding its reach into the U.K. market, having acquired two meal delivery services last year: Fresh Fitness Food and Detox Kitchen.

While Fresh Fitness Food did not previously secure funding, Detox Kitchen had raised over $3.4 million through a combination of venture capital and equity crowdfunding, as per Crunchbase data.

Strategic Acquisition Rationale

Al Rawi explained that Calo evaluated over 50 meal subscription businesses globally between 2023 and 2024 to identify optimal expansion markets. The U.K. was ultimately selected due to its promising potential.

He further stated that both acquired companies exhibited a strong cultural alignment with Calo. The acquisitions were primarily aimed at enhancing Calo’s technological capabilities and branding, leveraging the existing operational infrastructure of the acquired businesses.

Integration and U.K. Market Penetration

Throughout the year, Calo focused on integrating its technology and processes with the U.K.-based platforms, ensuring no personnel reductions. This integration was completed in July, followed by a phased marketing campaign in the U.K.

Currently, Calo provides daily meal delivery services in London and operates a two to three times per week delivery schedule in other regions of the U.K. The company aims to achieve a tenfold increase in revenue within the U.K. market over the next three years.

Competitive Landscape in the U.K.

Calo’s expansion into the U.K. will involve navigating a competitive market. The company will face competition from established food delivery platforms like Just Eat and Deliveroo, as well as meal-box services such as Gousto and Wicked Kitchen.

Global Expansion and Partnerships

Alongside its U.K. focus, Calo is exploring opportunities to acquire additional meal-kit services internationally. The company is also expanding its physical footprint through retail stores and kiosks in various regions.

Furthermore, Calo has established a partnership with Armah Sports Company, a gym chain in Saudi Arabia, to offer bundled subscriptions combining Calo meal plans with gym memberships.