Travis Kalanick’s CloudKitchens has raised $400 million from Saudi Arabia’s Public Investment Fund in a deal that reportedly values the startup at $5 billion. The controversial founder of Uber is doing his best to stay under the radar, and even forbids employees to list their affiliation with his new company on their LinkedIn profiles.
- What they do: The company buys cheap or rundown real estate, often near city centers, where it builds commissary kitchens (AKA ghost kitchens) that it rents to restaurants wanting to prepare food exclusively for delivery services like DoorFash, Uber Eats, Seamless, Postmates, and Grubhub.
- Dig Deeper: The tenants renting the space might be chefs that want to test out a new food concept but don’t want to lay out the capital or take the risk of opening a new restaurant. Ghost kitchens may also appeal to existing restaurants that want more capacity to prepare food or make delivery available further from their traditional locations, according to the WSJ.
- Competitors include: SoftBank-backed Reef Technology and Kitchen United.
- Be Smart: The food-delivery business itself has been highly competitive with a questionable path to profitability. Just last week, shares of Grubhub dropped 40 percent after a disappointing earnings report.