An AMEinfo exclusive
This FENIX has risen and is ready to multiply from its home in Abu Dhabi into neighborhoods across the GCC, armed with e-micro mobility vehicles, scooters for now, and millions of venture dollars to deliver a 10-minute promise.
Growing from operating the largest fleet of electric vehicles in the Middle East, FENIX expanded its micro-mobility business with a mission to disrupt grocery and convenience goods delivery in more ways than one.
“Our ultimate mission is to serve our communities, propel them forward, and ignite positively impactful commerce,” IQ Sayed, Co-Founder and CTO of FENIX, shared with AMEinfo.
“And thanks to our integrated business model, we can make promises that no other similar service in the region can, including an eco-friendly 10-min delivery service, aka F10.”
With F10, FENIX is not only the fastest delivery service of fresh groceries and other convenience items in the GCC/MENA, but it is also free, with no conditional minimum order.
“Our economies of scale and low cost of operations allow us to continue delivering for free,” IQ said.
That being said, let’s look at how FENIX built its business, literally from the ground up.
The start: e-scooter business
Before going into the delivery business, FENIX had successfully rolled out shared e-scooters across the region along with the region’s first private subscription service called MyFENIX.
“With the daily shared e-scooter model, consumers download the app, take a ride and that’s it. The weekly or monthly subscription model is designed for those who desire e-scooters for short-term short distances without needing to buy it upfront or repair it,” IQ explained.
“So, we already had the experience and ability to track scooters and usage journeys while making sure the customer is always happy with the service, and this paved the way for our foray into the grocery delivery space.”
An integrated delivery model
Rapid delivery of fresh groceries and convenience items is a booming business that already attracted billions in investor funds and millions of users regionally and globally, using vehicles ranging from gasoline-powered cars, bikes, and mopeds to electric micro-mobility means of transport.
“The problem with the existing models varies from delivery businesses using costly fuels, charging massive commissions to supermarkets for their service, and not having the mechanical and workshop expertise to maintain their vehicles, and this necessitated having third parties share in operating margins and ultimately driving up prices on consumers,” IQ said.
“For us, what is really important is to own the entire vertical. We do that for the shared and subscription scooter models and now as well for grocery deliveries, as a way to ensure the highest quality of goods, keep the promise of 10 min deliveries, save on costs, act quickly on client feedback, implement improvements, and create business synergies.”
Jaideep Dhanoa, Co-Founder and CEO of FENIX, said at a recent launch: “Imagine having a supermarket on demand in your kitchen. You get your time back, with ultimate freedom.”
That’s the idea behind F10, and while no one can guarantee delivery in 10 minutes or less every single time, FENIX makes sure to compensate consumers when the service exceeds 10 minutes by awarding them credits, or additional values on the FENIX platform. And that’s rare. Thus far, the company has been able to keep its promise with an average delivery time of 7 minutes with over 99% of orders delivered on time.
“Owning the vertical translates into an ability to cross-sell and introduce other things we are offering and which going forward will include much broader choices,” IQ indicated.
Currently operating from Abu Dhabi’s Reem Island, a dense mixed-use development in the UAE capital, F10 is a revolution that achieves two important aspects for consumers.
“First, it takes the planning out. We hire experts specialized in shopping on your behalf, carefully selecting items people should be interested in, and always ensuring high quality,” IQ stated.
“The second is expediency and saving end-users a trip to the store and F10 will in the future encompass other convenience items than groceries.”
Each delivery scooter is equipped with integrated sanitizing dispensers and customers also have the choice to opt for contactless deliveries through the app available for download on the Google Play Store and iOS App Store.
IQ said he wasn’t aware of anyone with a 10-min delivery promise, where most go for the safer bet of 20-30 min, and with delivery operators using various types of vehicles.
“We are strong believers in small electric vehicles, especially for the last mile,” IQ said.
“E-scooters, e-bikes, and mopeds can navigate the streets much better than 4-wheelers, and compared to gas motorbikes, e-micro mobility vehicles are eco-friendlier and more cost-efficient, so we plan on expanding in those ranges soon.”
FENIX dark stores
FENIX uses dark stores or what it calls ‘micro-fulfillment centers’ to essentially maintain inventory, but it’s the company’s core business model from which expansion is possible.
“Dark stores are shops outfitted with equipment to store inventories, things like fridges, freezers, and shelves. Inventory is anything you would shop for in a supermarket,” IQ described.
“In a vertically integrated and wholly-owned offering, the big value proposition is to own stores and control the inventory, quality, and margins on them. Our revenues are also derived from buying food stock items wholesale and selling them retail at affordable prices.”
IQ elaborated that for non-dark stores like regular supermarkets, “you have many sales sources and the inexperience of placing orders and tracking them typically ends up in having items being missing or misplaced.”
Dark stores solve that problem using a robust logistics platform and keeping storage space small.
“We don’t want to have huge stores so that we can keep pick-up time within 1 or 2 minutes. It helps achieve F10 by having dark stores within an optimal radius from consumers.”
FENIX’s two business lines of passenger micro-mobility and rapid deliveries provide considerable synergies and overlapping capabilities. By co-locating e-scooter charging stations within dark stores, using existing shared vehicles for deliveries, leveraging ops slack capacity as delivery riders, and cross-selling to existing customers, FENIX has been able to expand into rapid deliveries relatively quickly with a much lower cost base compared to potential standalone players.
“We are well funded having raised our $3.5 million seed round last November and closed it at $5 million, making it the biggest pre-launch funding round in the region, reflecting investor confidence in our business model,” IQ said.
The company’s first real expansion happened on a service level with F10 but will be followed by investing in new features and innovations on the operations side while adding a range of e-mobility vehicles, including e-bikes and mopeds.
FENIX operates the ‘scooter-share and subscription models’ in 5 countries, namely the UAE, Qatar, Bahrain, Saudi, and Turkey, and in 13 cities, but currently has the grocery delivery solely in the UAE.
“We will be launching new delivery operations in other GCC cities soon, but primarily in densely populated locations like Saudi and Qatar,” IQ revealed.
Along with seed money, revenues for FENIX rely on reusing the workforce within its business offerings and generating revenues from dark store sales.
“We target to make 40% gross margins on goods sold and 10% profits,” IQ indicated.
On good days, fulfillment centers can do anywhere between 100-1000 orders per day, with an average invoice of AED 50 ($13.6).
“Over the next 12-24 months, we want to duplicate the effort with a few dozen dark stores across the GCC, especially those proven mature enough with online delivery concepts,” announced IQ.
If it’s free and in 10, it’s the Fenix F10 in a neighborhood near you.