The Road to IPOs

[Music] who has invested in uh IPO listings here in the region hands up oh wow okay we got lots of customers new customers um okay second question who is going to invest in the IPO of talabat tomorrow wow okay hands up come on don't be shy everyone okay all right so this is about the uh the road to IPO for Kopi maybe I'll start by giving you all just a page out of my uh history with with Mo so I meet Mo uh at an Endeavor event and at the event I was Star Struck immedi saw special qualities in him and his brother Bilal they were running a business called BMB which was basically making sweets and chocolates for big Brands like Pachi if you know Pachi um I worked with him closely I was an Endeavor Mentor he was an Endeavor uh company I had the privilege of spending time with him in the trenches in his previous business he then exited that business we stayed very close and one day he calls me up and says where are you said I'm in the office he said I've got pizza I'm bringing pizza I want to have lunch with you I got I've got to run this idea by you I said awesome come over half an hour later he was in the room he was in the office and he said listen to this are you all ready for this he said I am going to save the FNB industry and I was like huh how and why and he says well first of all the old landlord the physical landlord is at 10% cost of sales the new landlord which is the digital landlord which is talked about t about a second ago is taking 30% probably even more of sales FNB Outlets are going to have to do more online as they grow in this digital world and they're going to need efficient ways of growing their business I am going to start a cloud kitchen company that is going to put 10 brands in every Cloud kitchen and help these Brands become a hell of a lot more efficient I was like wow okay let me get my head around that so with that backdrop Mo can you tell the audience first of all your sort of first chapter of being a cloud kitchen operator and then how you've basically transitioned into being a tech enabled FMB platform and why so uh 2018 I uh after coming to Danny and he rejected me a few times before he finally said yes that's not true by the way um the the problem you were trying to solve was that to the restaurant to the restaurants you were a B2B uh a solution provider and and the goal was how do we power the ond demand food economy and restaurants were going bust right because while they were all growing their their margins were shrinking because a lot of that physical uh uh landlord became a digital landlord and uh and economics didn't stack up so I I went and said look I've done this before in The Confectionary space where I've allowed you know different retailers to avoid having to build these big chalk factories how can I replicate that in the food space much more complex you don't have a you know a twoe window to run a production run you have you know eight minutes to run a production run uh but I think I know how to do it and I have a great team joining me on this and um and so the solution was how do I use one kitchen and allow multiple Brands to come in uh where I was the operator I would cook on their behalf I as Kopi and we would be the ones who would uh produce the food um and and uh and that's how we started so chapter one took us around three years to to get to around $100 million of Revenue uh but like most businesses I think we went a little too extreme in trying to solve this problem and the the problem of uh of of restaurants figuring out food delivery was was uh specifically during covid EXA was exaggerated that became a big issue because everyone just had food delivery but soon after covid started um calming down we we realized that the physical experience is still needed and two things happened we realized that you know customers wanted to have physical experiences so not just get food on delivery and uh that operating a cloud kitchen where 100% of your business is on food delivery and you don't own any of the brands uh Prov to be very a very complex operation and uh what we had to do is uh vertically integrate and own the content in order to two things one have a better control over our supply chain but also to build on better customer experiences uh so chapter one was a a business that uh uh that really changed how you know restaurants expand digital age in Chapter 2 we evolve from that to being um today the largest um fast casual multi-brand operator in the region all right now the most exciting so let me ask you a question that vision is about seven years old the half life of that vision is seven years old six and a half six and a half all right let's that's ha is um what's what's next what is what are you today uh more specifically and how do you envisage this playing out going forward so one thing we realized when we got into our chapter two which is uh the the multibrand Omni Channel operation was we went from being delvery only to having a physical experience or a series of different brands with physical experiences and um we realized one key thing right there's a there's a big difference between service the service industry on the hospitality industry right so the service industry is how do you really be able to uh scale up repetitive tasks uh and and create this consistent experience so McDonald's does that and a lot of the qsrs do that but uh if you want to go and and build some build something in a Hospitality space where you're able to really give something Beyond a consistent service but build on these emotional experiences you uh there's very little out there there's very there's not a single company we know of globally that's been able to solve that problem so chapter three uh which is really more about where we're going next is how do we make Hospitality scalable and that's something that uh no one has been able to do globally and because it's just reliant on people and if you think about that last experience in in maybe the uh you know in like a Four Season I think that's one of the brands in the hospitality space that's really been able to scale up Hospitality globally but on the more on the restaurant side of things uh there's a reason why restaurant specifically uh on the more fast casual or casual dining side uh don't scale scale up successfully and that's because the complexity of scaling up Hospitality when it revolves so much around people and uh and and we're in an industry which has the one of the highest attrition in the world and so what we're doing next is how do we figure out or how do we really make Hospitality very scalable and uh and this is what we've proven in the last uh year to be able to really do successfully can you maybe just share with the audience um the customer journey of what that actually looks like because I think I understand it but they probably don't so if you think about the the standard experience you would have going to uh any one of the brands in fast casual space today you'd go out as a customer if you're going on an offline experience on a physical experience you go out order the cashier they don't know who you are order the table they don't know who you are You' order and then um you you hopefully will get a good experience consistent experience no matter where you go uh or if you go online you're most probably going to one of these platforms they also don't know who the restaurant doesn't know who you are and you're also hopefully getting a good experience our view is how do we go take it from you getting a consistently good experience to you getting a really Superior Hospitality style experience and the way we're trying to do that or we are doing that is by connecting the entire experience together right so we're terming this notion connected hospitality is how do we really link up your your offline experience with your online experience and and really creating that personalization engine so today you can come to any one of kopy's locations you can check in uh as soon as you check in we know who you are we know Danny is entered we know exactly what Danny likes to eat what his last order was like and we can start really building up some personalized experiences for Dany based on uh what's relevant for him and so that's what we've been doing and really evolving this Omni Channel experience from being just in silos so every brand sitting separately to now being a connected ecosystem where that Aon experience and that online experience is really connected in and doing something in the restaurant space that really has never been done before okay so since this topic is about um the road to IPO basic question why even consider an IPO so we uh we we thought a lot about this and uh and every uh founder who has taken a company public uh that I've spoken to always said don't do it like this is the worst thing you can do I wouldn't wish this on on anyone and um so made me really think about like why is everyone taking companies public when um when the experience of those who have gone public specifically in the last three years has been a very uh Troublesome one uh but that said there's a couple reasons why we think it's important for us so first we're Venture backed and uh and a lot of our early stage investors and grow stage investors uh need to monitize and uh given the size of the business we've reached at uh we think that's a good way for us to to create the right returns for them um the second is uh we do want to continue uh on our m&a journey of acquiring relevant homegrown heroes in our region and uh and we want a currency to do that very effectively and so for those two reasons including also attracting the right Talent who who value working in a public company uh so we want to be uh we think that that that's probably the evolution of where we're going to be in the next uh two years and for the crazy founders that will go against the advice of not going public what is what is it what how different is life operating life the M the moment you decided you wanted to go public and you have line of sight on on IPO so there's a so so maybe I mean face that like the way I we think about is what do we need to look like as a company to be able to go to be a public company and uh and and the way we established our right our our earn the right uh Milestones is one we need to of a very predictable growth engine really a a really Bottoms Up approach to uh being able to predict what's going to happen in the next few years I think 2024 was a great year for us where we were able to predict very effectively what's going to how is it going to play out and just having another year or two um of that exact predictable growth engine Kopi so that's one being able to predict what's to come I also think you need to build scale um so in in uh in the next two years or so we should uh cross the billion do Mark and and I think that's the right uh I guess scale we believe to be able to go public to go public and from a compliance and Readiness we've uh We've achieved that right so we wanted to make sure that the only reason the only thing we're waiting for is not a compliance related topic uh but more focused on how do we make sure we just time it so that we're going public at really the right time for our business and which exchanges are you considering and I guess the the let's knock the easy one out is it the us and if not if it's I guess if it's the regional exchanges what are the pros and cons of the different exchanges so if You' ask me uh two or three years ago we would probably say we're still going to keep us as an option today an emerging an Emerging Market business um listing in the US probably doesn't make sense uh so we are looking at the region specifically UE and Saudi and um and so it it will be a regional player and uh and we are keeping our options open to look at both EX what do you need what do you need from the exchanges um in order to go public and maybe maybe we can end on the arguments for UAE listing and the arguments for Saudi listing so two big top two big things we we're looking at so one is from a regulation perspective we would probably need a few exemptions and uh to be able to list given the current uh uh regulatory environment in in both Saudi Arabia and in the UE uh which we uh in in discussion with the regular ators we think that um you know that hopefully should not be a problem uh I think the second one is probably the bigger one which is the liquidity in the market and um you know speaking to a couple of potential investors who would have been part of that next uh evolution of Kopi I think the biggest thing on people's mind is like can we create Deca corn style outcomes out of the region and is there enough liquidity if we were to come in and in the future want to trade and so on these two topics um we think the answer is yes right tbat hopefully will be our first Regional uh Tech decacorn or high growth decacorn and uh and that's what PVE the way to show now our region can create really massive outcomes and the second one from a liquidity perspective we think that you know there's a lot more liquidity now than ever before uh and uh and hopefully in the next uh few years we should see substantially more liquidity and I think you know the discussion of is it Prim is primary Capital available I think you know that's already been proven it is I think what we're really looking at now is can there be the right level of secondary cap like can can our investors exit down the line um uh will there be enough uh you know um secondary listings follow on offerings so those are the kind of things we'd be looking at uh and seeing whether in the uee uh or Saudi you know how that how does that evolve over time awesome thank you I guess we're out of time thank you Mo thank you everyone thank you [Music] I