HSBC Saudi Arabia will be the sole financial adviser and global coordinator for its potential IPO on Nomu, the Saudi stock exchange’s secondary market, which imposes lighter listing requirements to encourage smaller businesses and startups to raise equity.
Founded in 2016, the homegrown firm Jahez processed about 20 million restaurant orders through its app in 2020, it said recently, without disclosing details about its potential valuation. It closed a $36.5 million funding round last year.
Jahez linked 2 million customers with 13,000 restaurants and 45,000 delivery partners across 47 Saudi cities.
Food delivery companies have been flooded with cash from investors betting the pandemic brought a permanent shift in shopper habits.
Delivery app Deliveroo raised $2.1 billion in its listing on March 31 but then saw its shares plunge more than 30% in their debut as investors were discouraged by the way the company dealt with drivers.
Jahez has also been expanding in other areas such as last-mile logistics and cloud kitchens.
Food delivery market growth
The IPO could add to a string of listings in Saudi Arabia, where companies are taking advantage of investors’ demand for new offerings and as state entities look to raise money to bankroll efforts to diversify the economy.
Saudi grocery delivery app Nana also raised $18 mn last year.
Jahez said “an improving Saudi economy and the resulting rise in employment and disposable income” will fuel further food and e-commerce spending.
Saudi’s online food ordering and delivery market was valued at $511 mn in 2020 and is forecast to grow at 10% between 2021 and 2026.
Even after the challenge of the pandemic in 2020, the market showed consistent growth. Digitization and the emergence of advanced online services are expected to drive the Saudi online food ordering and delivery market in the next 5 years.
End users, especially GenZers looking for convenience and time savings, will appreciate in-depth information regarding their food, can compare the food and price options, access feedback from previous buyers, avail various promotional schemes/offers, track the delivery person, and make payment through various options like online payment, e-wallet payment, and Cash on Delivery (CoD).
The major players operating in Saudi’s online food ordering and delivery market include Talabat, Hunger Station, Careem, Jahez, Mrsool Inc, Jahez, Lugmety, Toyou, Mathagi, The Chefz, and Wssel, among others.