Can Saudi Arabia be the Next Bet for Investors in Food Delivery Startups?

If you’re thinking about where to place your next big bet in the food delivery world, let me save you the trouble—look at Saudi Arabia. Yep, the Kingdom isn’t just about oil and dunes anymore; it’s quickly becoming a playground for food delivery startups, and the numbers are seriously appetizing.

Let’s break it down. The online food delivery market in Saudi Arabia is on fire, with its GMV (Gross Merchandise Value) projected to jump from SAR 21 billion in 2024 to a juicy SAR 37 billion by 2029. Sounds promising, right? But wait, there’s more.

A Massive Market That’s Hungry for Innovation

Saudi Arabia’s food and grocery retail market is worth SAR 190 billion—yeah, billion. While food service takes up a big chunk, the online food delivery segment is stealing the show. Urban areas are embracing the convenience of delivery, and platforms like HungerStation and Jahez are leading the charge. Together, they hold a whopping 66% of the KSA food aggregator market share.

The Central region, led by Riyadh, dominates the market. It’s not just the population—it’s the high disposable incomes and a tech-savvy younger generation driving demand here. Riyadh alone holds over 30% of the Saudi population.

But other regions are catching up fast, cities like Jeddah and Makkah also contribute significantly. Urbanization and rising incomes in the Eastern provinces and beyond are expanding the market’s horizons, bringing in previously untapped consumer segments. The rest of KSA is expanding at the highest CAGR at 17% from 2024 - 2029—a clear sign that regional players have plenty of room to grow.

Cuisine Wars: What’s on the Menu?

Fast food is a clear favourite, dominating the market with SAR 6.8 billion in GMV in 2024 and projected to reach SAR 12.2 billion by 2029. Affordability, convenience, and strong local demand make this segment a winner. But it’s not all burgers and fries. International cuisines are gaining traction, thanks to a booming tourism sector that recorded over 100 million visitors in 2024 alone.

Meanwhile, healthier options like organic and diet-focused meals are growing at a rapid 17% CAGR. Urban consumers are increasingly opting for diverse food choices, aligning with global trends favouring healthier and more sustainable lifestyles. Even traditional Saudi cuisine, though smaller in scale, remains a staple for culturally rooted consumers.

Who’s Ordering?

It’s not just about what’s being delivered—it’s about who’s ordering. Young professionals lead the charge, with their GMV share projected to grow from SAR 9.8 billion in 2024 to SAR 17.9 billion by 2029. Their busy lifestyles and preference for convenience make them the prime market segment for food delivery startups.

Students and families are also significant contributors. Students demand affordable meal options, while families look for value-oriented, home-style meals. Niche segments like expatriates and retirees are emerging too, showing strong potential for specialized meal plans catering to diverse dietary preferences.

The Big Question Here Should You Bet on Saudi Arabia?

Here’s the deal. Saudi Arabia’s food delivery market is huge, but what makes it exciting is how much room there is to grow. Only 10% of the total addressable market has been tapped so far. And with only 10 players in the industry, consolidation is inevitable. That means partnerships, mergers, and innovations are just getting started.

Take HungerStation, for example. It’s the market leader but is constantly evolving through partnerships with platforms like Lulu. Meanwhile, niche players like The Chefz and Nana are carving out their spaces, proving there’s plenty of room for creativity.

The way things are shaping up, Saudi Arabia is becoming the perfect storm of demand, growth, and opportunity for food delivery startups. Whether you’re a startup founder or an investor, the Kingdom is serving up a once-in-a-lifetime chance. So, what do you say—ready to grab a piece of the pie?