Munch:On makes old business model hard to swallow

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Low-cost meals delivered in bulk from restaurants is one of the only ways of making the food delivery business in the UAE truly sustainable.

So says Dana Baki, co-founder of Munch:On, the platform recently acquired by Uber-owned, Dubai-headquartered Careem.

Created in 2016 by Baki, Mohammad Al Zaben and Awn Ali, Munch:On is a subscription-based food delivery service where users can order discounted, regular meals which restaurants prepare and deliver during their downtime, usually in the mornings before lunchtime.

Munch:On has processed over 2.5 million orders to around 60,000 customers in 20,000 companies from 1,000 restaurant partners in the UAE and Saudi Arabia.

The food delivery sector, dominated by international rivals such as Talabat and Deliveroo, have been criticised recently for their operating model with some commentators questioning how sustainable they can be for Gulf restaurants and drivers.

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But Baki believes that Munch:On’s low-cost idea is can survive in the long-term.

“The beauty of our model is that it’s inherently more efficient than an on-demand one-to-one place because we are aggregating orders by location,” she said.

“Whether it be by company or by area or by building, we have an algorithm that schedules the restaurants based off of the location or the company.

“So we’re always sending bulk orders to the restaurants at their downtime.

“It is quite expensive for people to order food delivery on a daily basis. We take it for granted sometimes, but it’s actually quite expensive.

“And most people are only ordering food delivery on special occasions or weekends. The average is somewhere around three or four times a month.

“So we made it so much more accessible for people to order on a daily basis from restaurants.”

The Munch:On founders revealed they had discussions with the big international food delivery brands before they decided to accept an offer from Careem, which is most famous for its ride-hailing function.

It now describes itself as a super app, offering everything from restaurant and grocery deliveries to PCR tests and online bill payment and money transfer facilities. 

What swayed Munch:On towards Careem, rather than partnering with the likes of Talabat or Deliveroo, is that they saw these operators attempt similar models without much success.

“They’ve all tried [and failed], mostly because their model isn’t built for that.

“We have the whole scheduling algorithm and productive modelling and route optimisation piece,” Baki said.

“It’s actually kind of counterintuitive that that would be a way for you to run low-cost. Low-cost means that it needs to still be efficient and profitable for all stakeholders.”

“It can’t be that it’s low-cost for the customer and then everyone else in the value chain has to pay marketing dollars to fund it,” Al Zaben added.

Munch:On and Careem began discussions long before the coronavirus pandemic struck in 2020, and the founders admit that while their company suffered initially during the lockdown period, their business ultimately thrived, helped mainly by rapid expansion in Saudi Arabia.

“We were hit really hard at the beginning [of the pandemic] when we didn’t know what was happening and people were still working from home,” Al Zaben said.

“But relatively quickly we did pivot in the UAE to serving residences and what helped us do that is just how the city is laid out and how people live in these high rises and communities.

“We decided to really double down on Saudi, and we launched our pro subscription there in December [2020]. And so, at that point in time we were back to our normal levels.

“And then, throughout 2021, we doubled in size thanks to launching three cities in Saudi,” he added.

Eventually Munch:On will be incorporated into the Careem app and the founders will be moving on to their next venture.

“It’s bittersweet,” Baki said. “You worked so hard on something, you’ve woken up every morning to work on this thing, and now you’ve achieved the goal, which is amazing. But I think there’s going to be a bit of sadness or uncertainty.”

Started in July 2012, Careem operates in over 100 cities across 12 countries and was acquired by Uber Technologies in January 2020 in a deal worth $3.1 billion.

There were reports that many employees had joined the Millionaires’ Club as a result of the Uber deal. When asked whether they have done the same, the Munch:On founders weren’t giving anything away.

“We cannot disclose it,” Al Zaben said.