For years, restaurants have generated huge amounts of sales data, but that has not made it easier for them to borrow. Foodics now wants to change exactly that. Here at Money 20/20, it has launched Capital 2.0, using restaurant performance data and AI-driven underwriting to pre-qualify businesses for funding that could be dispersed within four hours. Joining me is Amr Badr, COO of Foodics.
My pleasure. My pleasure.
What did Foodics learn from running the day-to-day operations and payments of restaurants that made you think you could also help decide who gets financed?
We serve around 40,000 restaurants in the region and have been in the industry for over ten years. We always look at restaurant pain points. What happens is restaurants are not judged on their performance and their trends — they are judged on their books and their collaterals. That is not usually fair, because we can see a restaurant that is trending, a restaurant with a lot of repeated customers. This gives us an indication — we know who is going to perform, who is going to expand. This is how we are able to funnel down who deserves a boost to grow. Our metric is their operations and their day-to-day data — not the historical and collateral.
What can you see in that live operating data that a traditional lender looking at financial statements might miss?
We live where the money is moving. We can see average check size, daily orders, how many orders are dine-in versus delivery where commission is being cut, how much is cash versus cards, inventory, how they manage their staff — we can estimate their bottom line. We are not fooled by paperwork. We can find restaurants doing very well on paper that are actually declining. On the other side, we find restaurants with not a lot of credit history that we know are going to boom. That is what the daily data gives us. And AI plays a big role in processing this data and turning it into events and actions.
An eligible restaurant can go from pre-qualification to money in its account within four hours. What have you automated to make that possible?
We live where the money is happening — this is where we are pre-qualifying you on the day you are doing better. We already understand the seasonality. We understand ice cream goes up in the summer. We understand Ramadan. So our AI is already doing the credit scoring based on all these data points and pre-approving you for an amount. We have automated the whole signature, the KYC — all of it is integrated with regulatory requirements. What we left for the human is the controls. The guardrails of what the AI is doing are set by humans. If there are edge cases or exceptions or major ticket sizes, a human decision may still happen. And we still commit to the four hours, even if a human is involved.
Financing ranges from 20,000 riyals for working capital to 2 million or more for expansion. How does the underwriting change as the ticket size grows?
For 20,000 riyals, speed is what matters most. It is not a major amount — it is meant for a need, maybe payroll or a supplies deal. Controls are easy and you can get it much faster. As the ticket size gets bigger, I start looking at the history of the restaurant — how long they have been with us, the owner's credit score, how all their branches are performing. We can link all of this together. It is not just one spreadsheet. We are looking at the whole organisation.
Repayments come out as a share of daily settlements rather than one large monthly payment. What happens when sales drop sharply or the business hits a bad season?
Because we already know the seasons and how they perform, when we see a month where sales are dropping we already understand what is happening. We have already factored it into our daily settlement. Even if we need to make minor adjustments, we are already detecting it — we are not waiting for the fact that a partner is not settling. The daily settlement gives the partner peace and gives us peace as well. We do not wait for a surprise in a month or two. Our account manager will get in contact with the customer over a couple of days. We understand the business and the seasonality. It is not surprising if sales drop through Ramadan — we are already planned for it. That is the beauty of being the operator that goes into the financing part as well.
Thank you for stopping by Fintech TV. My pleasure.
