I Thirsty For Expansion

By Hagar Omran

• STARTUPS •

Ali Al Ebrahim cornered the Middle East’s devotion to coffee when he launched COFE App in Kuwait four years ago. Now, with $13.2 million in total funding and a new acquisition fueling expansion, the founder and CEO has got his sights on a global goal.

you will recognize the joy that the sweet, warm aroma of your first cup brings as you reach for it in the morning—and you’re not alone. With deep roots in Middle Eastern culture, MEA’s coffee market was worth $10.5 billion in 2021, according to Ali Al Ebrahim, founder of Kuwaiti startup COFE App, making up 11% of the $95.4 billion global market. For him, when it comes to tuning into people’s need for coffee, the sky’s the limit.

COFE App’s user base has quadrupled in the last year, according to the founder. “We had over two million downloads in the past six months,” says Al Ebrahim. “More than what we did over the last two years.” Customers can order and pay for their coffee via the mobile app and choose from multiple delivery options, including fast delivery to their office or home, counter pick-up, or a car pick-up service.

Having officially launched in November 2018, the startup has since raised a total of $13.2 million from investors from two funding rounds: the first in February 2019, when it closed a $3.2 million Series A, and the second in April 2021, when it secured $10 million from the Kuwaiti Al Imtiaz Investment Group in a Series B. Today, the app works with over 700 brands in more than 3,000 locations. COFE App currently operates in Saudi, the U.A.E., and Kuwait. It plans to launch in Egypt next.

At the end of January 2022, COFE App expanded further by acquiring U.A.E.-based Sippy Beans for an undisclosed amount. Established in 2019 by cofounders Rafi Dikranian, Zouheir Fathallah, and Shehzeen

Ali Al Ebrahim “We are a marketplace for coffee, we’re not purely logistics or delivery.”

Jamil, Sippy Beans’ marketplace connected coffee drinkers and independent cafes to over 75 specialty roasters from the U.A.E. and around the world. With more than 500 types of coffee from 138 different farms across Africa, South America, and Asia, the business was serving customers across the Middle East, the U.K., and the U.S. It is now fully incorporated into COFE App, with Jamil leading on a COFEstore e-commerce feature. “The acquisition combined the expertise of Sippy Beans’ specialty knowledge and network with COFE App’s regional and global reach, high tech and an already existing large customer base of coffee drinkers,” says Jamil.

The acquisition supports Al Ebrahim’s plans to expand across the coffee supply chain by offering innovative features and customizable solutions to all kinds of coffee providers and lovers. “We are a marketplace for coffee, we’re not purely logistics or delivery,” he explains. “COFE App offers several services like pick-up, virtual drive-thru, and the e-commerce feature that offers services based on subscriptions for capsules and beans. It’s all about helping people spend less time waiting for their coffee and more time enjoying it.”

COFE App is now the dominant player in MENA, but it’s following a global trend. The global coffee market has witnessed several deals in recent years. In May 2018, Nestle agreed to pay $7.15 billion to market Starbucks’ consumer and foodservice products globally, outside of the company’s coffee shops. In the following August, the Coca-Cola Company announced that it had reached a definitive agreement to acquire Costa Limited for $5.1 billion. More locally, Kuwait’s Alshaya Group is reportedly currently seeking to sell a 30% stake in its Starbucks franchise, valuing the business at $15 billion. The COFE App founder expects this prospective deal to further drive up the coffee industry this year.

Conceptualized in Kuwait and developed in Silicon Valley, when COFE App first launched operations in Kuwait, it was the region’s only specialized coffee app. From day one, however, the goal was global expansion, with plans from the start to access international markets from the U.S. to Japan and the U.K. Al Ebrahim believes that the global coffee market will grow ten times in the next five years, creating even more investment opportunities. In terms of retail value, the global coffee market grew by 4.9% in 2021 to hit $95.4 billion, up from $90.9 billion in 2020, according to data from Euromonitor International. Outside of his role as an entrepreneur, Al Ebrahim’s passion still comes from his love of the product. “We started the idea based on two matters: the first one that we recognized the potential, and the second is that we are coffee lovers,” he reveals. However, expansion is at the forefront of the founder’s mind. In November 2021, COFE App announced a partnership with the MBC Group that will see the Saudi media conglomerate support COFE App in achieving its growth strategy through its channels, digital platforms, and events via marketing. The deal also gives MBC priority for investments in any future funding rounds for the startup.

Then, in February 2022, COFE App was one of three startups to join the Innovation Programme launched by the Abu Dhabi Investment Office (ADIO), which has an incentive pool totaling $545 million. By joining the program, COFE App will receive financial support from ADIO, although Al Ebrahim declines to reveal how much. COFE App will also relocate its global headquarters to Abu Dhabi.

Al Ebrahim says that the partnership, combined with the startup’s total funding raised, will help him to focus on market growth in the coming years, with two trends driving his plans: the boom of the super-app concept, and a more specialized business focus. “These trends are clear in the global market, and they will move to the region soon,” Al Ebrahim muses. “If people like something, they want a more specialized marketplace for it.”