Careem looks to get an edge on food delivery in the UAE, where it competes with the likes of Talabat, Zomato and Deliveroo.
Careem, one of the region’s leading multi-service platforms, announces its acquisition of food delivery platform MUNCH:ON in the UAE.
Founded in 2016 by Mohammad Al Zaben, Dana Baki, and Awn Ali, MUNCH:ON is a subscription-based food delivery platform which connects customers to meals at a discount by tapping into under-utilised kitchen capacity and using scheduling, bundling and routing software. The solution drives massive efficiencies for restaurants and cloud kitchens and has built scale in the corporate lunch segment.
While Careem is counted amongst the mainstream food delivery platforms in the UAE, it is competing with the likes of top player Talabat (which has the largest market share based on order volume), followed closely by (owned by Delivery Hero and operated by its subsidiary Talabat Middle East) and Deliveroo, according to Measurable AI, a consumer insights provider.
With this new acquisition, MUNCH:ON will stop daily operations, and will rebuild its services on the Careem app. The Careem Food and MUNCH:ON teams will work together to deliver even greater value by introducing low-cost meal segments that MUNCH:ON has pioneered in the region as well as new food discovery and delivery options for corporates.
“The MUNCH:ON team have built a competitive food offering driven by a clear vision to make food more accessible and affordable,” Mudassir Sheikha, CEO and Co-Founder of Careem, tells StartupScene. “The Food offer on the Careem app today serves millions of customers across the Middle East and is growing rapidly. By acquiring MUNCH:ON, Careem Food will be able to build an even more competitive offering with a much richer variety of benefits for both customers and restaurant partners.”
Meanwhile, MUNCH:ON has delivered millions of meals to customers across 20 thousand companies. “At MUNCH:ON, we set out to build the most affordable food ordering experience in the world,” says Mohammad Al Zaben, CEO and Co-Founder of MUNCH:ON. “We are thrilled to be a part of a broader mission at Careem to deliver undeniable value to customers, partners, and Captains.”
In the UAE, the Careem Super App offers more than a dozen services including ride-hailing, food and grocery delivery, micro-mobility, payments, and partner services including car rental, home cleaning and PCR testing. Careem Food serves millions of customers with access to over 18,000 restaurants in eight core cities across the UAE, Saudi Arabia, Jordan and Qatar.
Revenue for the online food delivery segment in the UAE is projected to reach $2.18 billion in 2022 with an expected annual growth rate of 6.33%, (CAGR 2022-2026), according to Statista. The number of online food delivery users is also expected to increase to 5.5 million by 2026, with a user penetration rate of around 44.5% in 2022.
Mergers and acquisitions (M&A) in the MENA region have been gaining momentum since 2021. Last year, a total of 47 M&A took place with 39 startups from the region being acquired by other startups or companies. Some of the most notable M&A that took place in 2021 include UAE-based Mumzword being acquired by Saudi Arabia’s Tamer Group, Egypt’s Eventtus by US-based Bevy, and Jordan-based POSRocket by Saudi’s Foodics. It is predicted that more acquisitions are in the cards for the MENA region’s startups as VC activity grows in the region.