From automated grocery business to robotics, Kuwait’s Raha is aiming high
▶ Company plans to secure more financing this year after its $7 million round in November,
Saleh Al Tunaib is a serial entrepreneur who is not afraid of failure.
“Follow your passion and learn from your mistakes” is the mantra of success for the Kuwaiti national, who has tested his own entrepreneurial limits by wading into ventures from mobile grocery shops to a restaurant company and a crowdfunding platform.
His latest venture, Raha, a Kuwait-based e-grocery and logistics tech venture, is the culmination of his experience over the past decade.
The start-up is testing new highs for logistics robotics and automation in the e-grocery sector in the region.
“I’m a person who just loves to take on challenges and explore new territories that I haven’t yet tested and that, I guess, is part of the DNA of any entrepreneur,” says Mr Al Tunaib, co-founder and chief executive of Raha. “I embraced these challenges every day, and I believe that’s what led me to be where I’m today.”
The online grocery market in the Middle East and North Africa region has been growing steadily, anchored by an acceleration in the grocery and food delivery categories.
The Mena online grocery market was worth $4.5 billion in 2022 and is forecast to expand at a compound annual growth rate of about 24 per cent, hitting $25 billion by 2030, RedSeer consultancy said.
The global online grocery market, meanwhile, was valued at $50.28 billion in 2022 and is estimated to expand at a compound annual rate of 26.8 per cent from 2023 to 2030, Grand View Research said.
The changing shopping preferences of consumers in the wake of the Covid-19 pandemic and the unabated growth of the e-commerce industry are expected to drive the market’s growth over the forecast period, it said.
With a master’s degree in accounting from the University of San Diego, Mr Al Tunaib started his career in Kuwait in 2010, working for companies such as Kaiku Finance, IFA Foods and Kuwait Real Estate Company.
He co-founded Jaribha, a crowdfunding platform in 2011, and later went on to work for the OnCost Cash and Carry chain of grocery stores in 2013, where he rose through the ranks to become chief executive in 2016.
During that time, he worked on his entrepreneurial ventures and his passion for Japanese food led to the creation of NU Restaurants, which managed four restaurants in Kuwait.
Mr Al Tunaib also co-founded Baqal, a mobile grocery delivery company in 2015, a venture that taught him a “few good lessons”.
It was during his chats with one of the international brands that wanted to expand into the GCC markets when Mr Al Tunaib realised the need for adding automation to warehouses of an e-grocery business to boost efficiency, increase volumes and cut costs in the longer run.
While talks with the international investor did not materialise, Kuwait’s Al Bahar Group and Saudi Arabia’s Al Aujan Enterprises agreed to back Mr Al Tunaib’s venture.
“I also managed to convince them [Al Bahar Group] to not fund it all because I wanted to have a diverse cap table,” Mr Al Tunaib says. “If you want to really build a start-up that is heavy in assets and also requires a huge capital at the beginning, you need to make sure you have the right cap table to support it.”
Although it is not typical to have a company among the co-founders, Mr Al Tunaib says he “brought the expertise to the table”, and the heavy asset nature of the start-up meant that it had to be backed by companies.
Raha was launched in April 2022 as an e-grocery company, integrating the full cycle of grocery delivery logistics from procurement to last-mile delivery.
The start-up operated from Kuwait’s first fully automated robotic warehouse, with a chilled storage capability. Developed by global warehouse automation specialist, Swisslog, the centre serves as the base of Raha’s technology-driven operational model that uses robots on top of an aluminium grid system to store and locate goods.
The venture raised $6.7 million in its seed funding round, led by Aujan Enterprises and Kuwait’s Nox Management, as well as venture capital company Cedar Mundi Ventures based in London.
Raha has now become a multi-sector technology and automation provider offering a variety of solutions. ShopRaha remains its automated grocery business in Kuwait.
It serves as a “proof of concept”, however, Raha as a holding company has ambitions to help other companies “replicate its success” through its advisory service, Mr Al Tunaib says.
Raha has added two more business lines: btr.tech, an intelligence-driven logistics consultancy, and Smooth Logistics, which provides third-party logistics services.
The btr.tech’s robotics and automation solutions have already started making inroads in Saudi Arabia and the UAE, as Raha aims to help other companies automate their logistics and warehouses.
The efficiency and productivity are unmatched and despite the upfront costs, robot-operated automated systems have far better profitability margins from the third year onwards when compared with conventional labour-intensive sorting and picking systems in the logistics centres, he says.
“It saves you on manpower, it saves you the amount of real estate you require … and it’s also very energy efficient.”
Raha has ambitions to expand its robotics and automation consultancy business across the Gulf states and beyond.
“There’s a lot of support from governments in the GCC for technology, and not just the import of technology, but also to become manufacturers of technology,” Mr Al Tunaib says.
“Five years from today, btr. tech could be actually manufacturing robots in the region.”
In December, the company announced the closure of its pre-series A financing round. Led by Soor Capital and Saudi Public Investment Fundbacked private equity company, eWTP Arabia Capital, the latest round has pushed the funds raised so far to $14 million.
Raha plans “much bigger” round of funding this year.
“We haven’t set out a date yet, but I’ll say it’s going to be the earlier part of next year (2024),” Mr Al Tunaib says.