A recipe for success

Even the most casual glance at Khalid Baareh’s CV tells you he is not afraid to leave his comfort zone. Born in the US, he grew up in Jordan and, aged 17, left home and moved back to the US for 10 years. After graduating from Texas A&M University with a BSc in Industrial Engineering in 2002, he joined Accenture in the US as a consultant rather than go into industry. 

It was a choice based largely, he explains, on the desire to gain exposure to a broad range of industries, companies and businesses – and a decision that was to serve him well some 17 years later when he founded Dubai-based cloud-kitchen provider iKcon in early 2019. 

But that is fast-forwarding the story. Following a four-year stint with Accenture, where he worked with Fortune 500 companies and eventually headed a major project covering the Middle East and North Africa (MENA) region, he moved to the Middle East in late 2006 as he shifted careers from consultancy to private equity. Beginning as a junior with Kuwait-based Farabi Investment group, he worked his way up the ladder for six years. He chose the MENA region to begin his private equity career because, “It was undergoing a crazy boom. Plus, I wanted to capitalise on my native language, Arabic, so it was a perfect fit for me.”

He cemented his experience by doing a PE programme at Oxford University in the UK, before doing an MBA in Corporate Finance at London Business School, which he completed in 2011.

LBS learnings for life

A winner of the LBS Accomplished Entrepreneurs Award in November 2022, Khalid reveals that his MBA influenced his future in unexpected ways: “It didn’t change who I am – I’m still that hungry, optimistic, driven kind of guy – but the network that I was with, the students who I attended classes with, the conversations that we had together, broadened my horizons and got me connected.” 

His time at LBS was to prove invaluable for another reason: “I think we were 63 students in that class and today 55 of us are on the same WhatsApp group. And if any one of us needs anything, anytime, any day, in any field, any industry, we support each other – and that’s priceless. I don’t think you get that at any other business school.” 

Khalid then reveals an amazing statistic. On the MBA, very few of the 63 students were C-suite execs; today around 40 are. “That says something about the power of the group and LBS,” he declares. “I’m sure we didn’t all become C-level execs just because we knew each other – it’s the support you get and seeing your friends becoming successful. In my opinion, if you want to be successful, you’ve got to surround yourself with successful people. That’s exactly the impact LBS had on us.”

Betting on hungry entrepreneurs

It was also at LBS that he met Kareem Abughazaleh, with whom he was to cofound iKcon. Having made around $650 million in professional investments in tech, e-commerce, education, healthcare and many other sectors, Khalid began investing for himself in around 2013, “making bets on startups that are led by hungry entrepreneurs with focus and experience”, and seeing through around 10 investments until 2019. 

Having led others through their startup journey – and having generated great returns to his investors – he decided it was time to put his own money into a business.

Launching iKcon

Khalid and Kareem noticed how the cloud-kitchen concept was taking off worldwide. Known as “ghost kitchens” in the US, the model disrupts the industry by using technology to marry cost-efficient shared spaces with online food-ordering apps. “I’d seen it all”, Khalid recalls. “I’d sat on the boards of companies and I knew what it takes and I knew cloud kitchens were going to be the next hot business. Kareem said ‘Let’s go!’ and we jumped on it. I designed iKcon in November 2018 and in February 2019 we got our first order – about four months from the day I resigned.” For Khalid, founding iKcon was challenging yet exciting – he knew how to grow businesses strategically and financially, and Kareem had all the operational experience. It was, he says, “a no-brainer”. 

Unsurprisingly for such a seasoned fundraiser, the seed-funding round was plain sailing: “I knew how to reach out, Kareem and I put a lot of our own money in, and we raised some from family and friends. The only trick was to spot who could add value as an investor, rather than just put cash up.” iKcon was established in early 2019 to address the burgeoning demand for food delivery in the Gulf Cooperation Council countries, supplying restaurants, chains, brands and food entrepreneurs (iKcon’s partners) looking to extend their customer reach without capital and operational outlay. It does so through a turnkey service, cooking and delivering partners’ food through iKcon’s network of tech-enabled cloud-kitchens throughout the region.

Crisis threatens

On the back of rapid growth in 2019, Khalid started a series A raise in January 2020. Knowing exactly who they wanted to raise the $20 million from, he started getting letters of interest and began sending out term sheets. Then, in April 2020, the Covid-19 pandemic hit and governments began shutting down cities. Khalid recalls, “Dubai started closing down and businesses started letting people go.” The disruption understandably made iKcon’s series A investors rethink things. The natural response was to say, “There’s a pandemic out there. Let’s just hold and see what happens in the world.” 

For Khalid, it was an enormously stressful time: “We didn’t know what was going to happen – we didn’t know if we were going to have a business or not. We were waiting for the agreements to be signed but then they were put on hold.” The board met in mid-April. Khalid told them, “We don’t have a long runway. We must act quickly.” Many board members wanted to downsize operations and let people go to preserve the fast-dwindling runway for as long as possible. All Khalid’s experience told him this was the wrong thing to do: “I knew the moment we did that our numbers would tank. We were in a hyper-growth industry and, if our numbers started dropping, I knew I wouldn’t be able to convince a single investor to invest.” Instead, he told the board they needed to double down “and show investors that this is good for us”.

Resilience in adversity

It turned out he was right. Although, as he admits now, he actually had “no idea what was going to happen,” the business model proved to be resilient during the pandemic. This served to reaffirm both the underlying growth in the industry and iKcon’s ability to capitalise fully on the opportunity. April 2020 proved to be the only month in iKcon’s history when it experienced a drop in top-line revenue, with figures rising significantly in May and June. As a result, Khalid was able to close the $20 million series A in July 2020.

The experience was an invaluable lesson for any entrepreneurial venture. He says, “As a startup, you’re not an established company that has been generating traffic, revenue and profit. If something unexpected happens and you dip a little, it’s okay as long as you show confidence to your investors and can point to growth and potential, despite all the challenges. Investors care about their returns and not the challenges you face as an entrepreneur.”

The sale

As iKcon grew exponentially, Khalid turned to raising an $80 million series B round. It was at this point, around summer 2021, that US-based REEF approached Khalid with a view to lead the series B or fully acquire the company. REEF submitted an attractive offer to buy iKcon outright. Khalid put the offer before the board and in November 2021 the shareholders elected to sell to the US market leader for an undisclosed sum. It was the first major deal in the MENA region for REEF and formed a key part in its global expansion strategy.

Advice for would-be entrepreneurs

Looking back, and having survived “a near nervous breakdown” with iKcon, the first word of wisdom Khalid has for would-be entrepreneurs is that you have to enjoy life “to an amazing extent”. That means you also have to be able to dedicate everything to the endeavour. “It’s going to take all of your time, so you have to be ready emotionally, mentally and physically,” he advises. “If you’ve just got married or don’t have the time for whatever reason, it isn’t the moment to launch a startup.”

His second must-have is total confidence in what you’re doing: “Throughout your journey, you will encounter a lot of doubters – people and investors who doubt the industry, doubt your ability to deliver, doubt your management team. I think this is toxic to any entrepreneur. Learn from others, but don’t let anyone bring you down. Ignore the negativity and have confidence in yourself.”