Run the Numbers with CJ Gustafson

Episode: From Massive Corporate to Tiny Startup: Foodics CFO Abdullah Tahboub on Making the Leap
Date: March 3, 2025

Episode Overview

In this episode, CJ Gustafson interviews Abdullah Tahboub, CFO of Foodics, about his path from a high-powered corporate finance role at a major telecom in Jordan to joining Foodics, then a small Saudi startup, now a leading SaaS/Fintech player in the Middle East’s restaurant tech scene. The conversation dives deep into the differences between corporate and startup finance, the rapid digital transformation in the region’s F&B industry, how Foodics built a holistic business model integrating SaaS and payments, and the bold organizational steps needed to drive innovation.

Key Discussion Points & Insights

1. Taking the Leap: Moving from Corporate to Startup

• Risk vs. Reward

  • Abdullah describes the personal and professional risk in leaving a massive, stable telecom company for a fledgling startup:
    • “A lot of people called me crazy... I think most of my friends, my colleagues, everyone like saying Abdullah, what you are doing?” (06:33)
    • His personality and Saudi Arabia’s expanding startup ecosystem drove his decision.
  • CFOs are trained to mitigate risks, but should periodically take calculated risks:
    • “As CFOs we are really trained to mitigate risk... [But] if you believe that that risk is reasonable, I would advise people to take that risk.” (08:11)

• Convincing Others

  • Abdullah actively encouraged friends to leave their comfort zones and join startups—now, “they are very thankful.” (09:31)

2. CFO in Corporate vs. Startup: Expectations and Reality

• In corporate:

  • “You spend most of your time on risk management, governance, board preparations… and politics, which I really, really hate, but unfortunately it's part of corporate life.” (10:07)

• In a startup:

  • “You have multiple hats… one day you're a CFO, the next you're helping drive sales, or expansion strategy, product, or fundraising.” (10:07)
  • Decisions have immediate and outsized impacts (“one decision can take your company 2x and 3x”). (11:53)
  • Feedback loops are faster and politics are lower: “There's no time for politics, which is great.” (10:07)

• On Hybrid Work & Decision Making:

  • “I advocate always working in office... once you are all in the office you can make decisions way much faster.” (13:16)

• On Company Politics:

  • “Politics is not related really to setup (remote vs in-person)... it's more of the culture and top management alignment.” (14:44)
  • In startups, everyone is “working together to maximize the value of that company.” (14:44)

3. The Middle Eastern F&B Industry: State and Transformation

• Digital enablement and cloud adoption are rapidly changing the region:

  • “Now everybody's shifting to the cloud… unlimited capabilities, integrated systems… strong APIs.” (16:20)
  • Cloud kitchens, dark stores, and franchise models are emerging.
  • “We have 30% market share in Saudi… restaurants start with one store and now in two years have more than 80 or 90 stores.” (17:08)

• Unique regional features:

  • Digital transformation pace is “much faster—five years ago, no systems at all; now, everyone wants a proper cloud solution.” (21:52)
  • Adoption of cashless payments skyrocketed from 25% to 65% within a few years, with prevalent tap technology. (21:52)
  • Saudi’s economic diversification (e.g., "Red Sea projects", amusement parks) is spurring demand for hospitality and F&B. (23:07)
    • “Growth in the economy itself means more cash inflow and more disposable income... more spend for F&B.” (23:07)

4. Foodics’ Business Model Evolution

• Initial Focus:

  • Built a robust, cloud-based cashier system as the “source of truth”—critical for expansion. (24:34, 28:04)
  • “It was absolutely the right move... all other modules can be built on the cashier, but not vice versa.” (29:36, 29:59)

• Adding Value:

  • Added inventory, kitchen display, and then an open marketplace (integrations with loyalty, delivery, etc.). (24:34)
  • 2020: Received regional payment license—pivotal for SaaS + Fintech expansion (30:04).
    • Provided fully integrated payment terminals, enabling smoother end-of-day reconciliation.
    • Built waiter apps, self-service kiosks, etc.

• Next Phase: Integrated Lending

  • New product lets merchants pre-qualify and receive loans in two hours, repaid from the payment terminal:
    • “We know who is like the risky ones, who are not... we can extend loans within two hours versus [banks, which take] three to four weeks.” (00:00, 24:34)
    • Credit-scoring driven by real merchant data and algorithms.

• Why Payments Integration Matters:

  • “Now Foodics is processing around $1 billion of GMV on a monthly basis and... can monetize all of this huge volume.” (30:56)
  • Payments are forecastable and, when tightly integrated with SaaS, as “sticky” and recurring as subscriptions. (36:18)

5. Expanding into Fintech: Building a Lending Function

• Build strong trust with restaurants—they entrust Foodics with their cash flow.
• Partnerships with strong banks and compliance with local regulations (e.g., SAMA, Saudi’s central bank) are critical for credibility. (31:50)
• Careful, data-driven credit scoring and a block-by-block rollout are vital to avoid bad debt.
  • “Machine learning and AI is very important because you can also have this built in within your model.” (31:50)
  • Differentiation: “Banks will dry on the data that the merchants provide versus in our case, we have all the algorithms built in the system...” (34:40)
• Payments “is the name of the game for the coming at least five years.” (35:15)
• Ultimately, Foodics aims for a revenue split of roughly 50/50 between SaaS and payments. (35:15)

6. Forecasting Payments Revenue

• Payments can be modeled for predictability—seasonality and customer behavior are key variables.
  • “You need to understand customer behavior. For example, we have the holy month of Ramadan where in the first 20 days we witness a sharp decrease in volumes...” (37:35)
  • Back-to-school, school holidays, and other regional quirks have large effects.
  • “Every business has these interesting rhythms to it and you need to get some quarters under your belt to fully understand how customers behave.” (39:06, 39:59)

7. Team Structure: Selling SaaS vs. Payments

• Specialized teams are essential:

  • “You need to have great specialized team... guys responsible for the fintech business need to have a strong understanding of specific regulations...” (40:46)
  • “It’s a complete different requirements... that's again the beauty of working in startup. Like you always need to see, reflect clear and reflect quickly.” (41:51)

• Early mistake: Initially thought sales teams could just add payments easily—turned out payments sales is a skill set of its own. (41:51)

8. CFO Learning Curve and Advice

• Payments required a steep learning curve for Abdullah, coming from telecom/SaaS packages:
  • “When we added the payment, all the concepts were new... but that's also why you should always start small and then you start scaling the business.” (42:41)
  • Having strong advisors is crucial: “That's something I definitely also advise people, to have strong advisors next to them.” (44:03)
  • “Always ask. Don't be shy from asking. If you don't ask, you will never have the answer.” (45:17, 45:26)

Notable Quotes & Memorable Moments

• On risk-taking as a CFO:
  “We are responsible for risk management... but we need to do it in a more balanced approach... if you believe that the risk is reasonable, I would advise people to take that risk.” — Abdullah (08:11)
• Corporate vs Startup Life:
  “In the startup life, one decision can take your company 2x and 3x... in corporate it's always minimal impact.” — Abdullah (11:53)
• On office culture and speed:
  “I advocate always working in the office... all decisions are taken very fast. We meet together, a quick meeting, a quick decision, and we move on.” — Abdullah (13:16)
• Building trust in payments:
  “You need to gain the trust of your merchants. You need to make sure that they understand that there is no missing cash at the end of the day.” — Abdullah (31:50)
• The importance of becoming the ‘source of truth’:
  “All other modules can be built on the cashier, but it's not vice versa.” — Abdullah (29:36)
• Advice to other CFOs:
  “Join the startup industry earlier... I should not wait until I'm 40 to move to startup life.” — Abdullah (47:44)
• On underperformers and leadership:
  “Once you give enough chances to those underperformers, then that’s it... if you don't take these decisions, you are penalizing the company.” — Abdullah (45:44)
• On forecasting in payments:
  “There are very clear patterns that happens... you need to build models where you can really capture this data and make sure they are reflected in your forecasting models.” — Abdullah (39:59)

Timestamps for Key Segments

• 06:33 – Abdullah on leaving corporate for startup
• 08:11 – On CFOs and embracing calculated risks
• 10:07 – Differences between corporate and startup CFO roles
• 13:16 – Why in-office setups drive startup speed
• 16:20 – Digital transformation in MENA’s F&B industry
• 21:52 – Unique Middle Eastern trends: digital, cashless, economic diversification
• 24:34 – Foodics’ business model: cashier–>marketplace–>payments–>lending
• 29:36 – Importance of being the system’s “source of truth”
• 31:50 – Foundational steps and discipline in payments/fintech
• 34:40 – Why banks can’t compete on merchant data & credit models
• 35:15 – SaaS vs. payments: revenue streams and future focus
• 37:35 – Forecasting payments: seasonality and customer behavior
• 40:46 – The need for specialized teams: SaaS vs. payments
• 41:51 – Lessons learned trying to cross-train sales
• 42:41 – CFO learning curve in payments/fintech
• 44:03 – Importance of having experienced advisors
• 47:44 – Advice Abdullah would give his younger self

Software Stack at Foodics (48:27)

• ERP/Accounting: Oracle NetSuite
• CRM/Billing: Salesforce (full suite, plus CPQ)
• Equity/Cap Table: Carta
• BI/Reporting: DCERN

Craziest Expense Attempt:
"In our region, every now and then we see some people trying to sneak… alcohol payments. Of course, we will not fail it.” (49:08)

Tone & Takeaways

• Very candid, humble, “in the trenches” perspective—Abdullah repeatedly stresses the humility of learning on the job and the value of networks and advice.
• CJ and Abdullah both demonstrate infectious curiosity about business models’ quirks and cycles.
• Clear message: For SaaS verticals, payments and fintech are a huge force multiplier—if you build trust, specialized teams, and nail the basics.

Highly recommended for:

• Startup and scale-up CFOs considering payments/fintech
• SaaS vertical founders
• Anyone navigating a move from corporate to high-growth startup
• Finance leaders seeking the inside roadmap on F&B and tech in emerging markets

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