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CloudKitchens

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CloudKitchens
Company typeSubsidiary
IndustryFood industry
Founded2016; 8 years ago (2016)
Founders
Area served
United States
Key people
Travis Kalanick (CEO)
ServicesVirtual restaurant
OwnerTravis Kalanick
ParentCity Storage Systems LLC
Websitecloudkitchens.com

CloudKitchens is a ghost kitchen company started by Diego Berdakin[1] and EarthLink founder Sky Dayton in 2015.[2][3] Travis Kalanick, cofounder of Uber, bought control of the company in 2018.[4]

CloudKitchens offers food preparation facilities for delivery-only food service.[5] The first CloudKitchens warehouse opened in Los Angeles, California.[6]

History

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In 2018, Travis Kalanick purchased a controlling stake in City Storage Systems LLC, founded by Diego Berdakin and Sky Dayton,[5] for $150 million, which operates as the parent company of CloudKitchens and is operated by Berdakin and Barak Diskin.[7][8] This parent company arrangement allows CloudKitchens to operate as a shell company and to keep a level of secrecy or stealth to the startup.[9][8][10][11]

In January 2019, Saudi Arabia's sovereign wealth fund, Public Investment Fund, invested $400 million in the startup's Series A round. By that time, Travis Kalanick had invested $300 million in the company; he sold $1.4 billion of his Uber stock by May 2019.[12][13] Sources noted Kalanick's ties to Saudi Arabia, which includes Kalanick serving on an advisory board for Neom, Saudi Arabia's plan to build a futuristic "mega city" in the desert.[14][15][16][13]

In November 2021, CloudKitchens raised another $850 million in a funding round, valuing the company at $15 billion.[17] Investors included Microsoft, which previously backed Kalanick's Uber.[18]

In 2022, the company was sued by three of its operators for allegedly violating labor laws and deceptive business practices.[19] According to a report published by Business Insider, over 70% of CloudKitchens' operators left the company within a year.[20] It was also alleged by partners that many facilities lacked property security and food safety measures.[21][22][23] The company closed down sites in New York and Tennessee, cut back on new building purchases, and conducted layoffs, according to a Financial Times report from September 2023.[24]

Ghost kitchen operations

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A ghost kitchen (or "dark kitchen"[12]) allows the kitchen space to operate as a commissary to others, which lets costs be shared and can exist in lower-overhead spaces than a standard restaurant.[25][26][27] Ghost kitchen partners include:

Otter

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CloudKitchens created Otter, a food order platform, which consolidates orders from various platforms (such as Uber Eats, Postmates, Caviar, DoorDash) for kitchens.[28][29]

Internet Food Court

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In April 2020, CloudKitchens launched—and closed—an experiment called the "Internet Food Court" in Koreatown, Los Angeles, with retro 8-bit. The Internet Food Court allowed families to order delivery from 100 virtual restaurants.[1]

Future Foods

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CloudKitchens' virtual restaurant division is named Future Foods.[30][31] Virtual restaurant brands (or "pseudo-restaurants"[32]) are the opposite of a ghost kitchen: they allow existing restaurants to deliver food with the Future Foods brands.[25] Future Foods handles marketing including food photography.[33]

These Future Foods brand orders are organized for a restaurateur using the Otter order system.[29]

CloudKitchens brands

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Acquisitions and lobbying

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It acquired FoodStars BH Ltd, which opened in 2015.[10][32]

Bradley Tusk, American businessman and politician, provides political lobbying for the company.[8]

References

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  1. ^ a b c d Patrick Fallon (April 5, 2020). "Amidst COVID-19, CloudKitchens Redefines Restaurants As We Know It". HNGRY. Retrieved June 1, 2021.
  2. ^ Loizos, Connie (February 1, 2019). "The next big bet for former Uber CEO Travis Kalanick may be cloud kitchens -- in China". TechCrunch. Retrieved July 3, 2023.
  3. ^ Avalos, George (December 4, 2018). "Uber co-founder's new company grabs downtown San Jose historic building". The Mercury News. Retrieved July 3, 2023.
  4. ^ "Microsoft invests in Travis Kalanick's CloudKitchens start-up". Financial Times. September 7, 2022. Retrieved July 3, 2023.
  5. ^ a b Kemp, Emma (June 17, 2020). "Ghost Ops: Counterfeit Kitchens in the Pandemic Age". Retrieved July 3, 2023.
  6. ^ Newberg, Matt (April 6, 2020). "Amidst COVID-19, CloudKitchens Redefines Restaurants As We Know It". HNGRY. Retrieved July 3, 2023.
  7. ^ Bhuiyan, Johana; Schleifer, Theodore (March 20, 2018). "Travis Kalanick is buying a new company that rehabs real estate and will run it as CEO". Vox.
  8. ^ a b c d e f g Meghan Morris (April 22, 2021). "Travis Kalanick's stealth $5 billion startup, CloudKitchens, is Uber all over again, ruled by a 'temple of bros,' insiders say". Business Insider. Retrieved June 1, 2021.
  9. ^ "CloudKitchens Pushes Nationwide Expansion With 40+ Locations". HNGRY. September 10, 2020. Retrieved June 1, 2021.
  10. ^ a b c Winkler, Rolfe; Jones, Rory (November 7, 2019). "Meet Travis Kalanick's Secret Startup, CloudKitchens". WSJ. Retrieved June 1, 2021.
  11. ^ Putzier, Konrad (October 20, 2020). "Uber Founder Turns Real-Estate Mogul for Ghost Kitchen Startup". WSJ. Retrieved June 1, 2021.
  12. ^ a b Kate Conger (December 24, 2019). "Uber Founder Travis Kalanick Leaves Board, Severing Last Tie". The New York Times. Retrieved June 1, 2021.
  13. ^ a b c d e Jones, Rory; Winkler, Rolfe (November 7, 2019). "Saudis Back Travis Kalanick's New Startup". WSJ. Retrieved June 1, 2021.
  14. ^ "Top tech execs will help Saudi Arabia build its mega city of the future". CNN. October 11, 2018. Archived from the original on October 13, 2018. Retrieved October 13, 2018.
  15. ^ "Some Silicon Valley Superstars Ditch Saudi Advisory Board After Khashoggi Disappearance, Some Stay Silent". The Intercept. October 12, 2018. Archived from the original on March 31, 2019. Retrieved October 13, 2018.
  16. ^ a b c Graham Rapier (November 7, 2019). "Uber founder Travis Kalanick has reportedly raised $400 million for his next act from Saudi Arabia. He'll be competing directly with his old company". Business Insider. Retrieved June 1, 2021.
  17. ^ Morris, Meghan (January 5, 2022). "Travis Kalanick's food startup CloudKitchens has tripled its valuation to $15 billion and tapped an Amazon veteran as CFO". Insider. Archived from the original on August 26, 2022.
  18. ^ Lee, Dave; Bradshaw, Tim (September 7, 2022). "Microsoft invests in Travis Kalanick's CloudKitchens start-up". Financial Times.
  19. ^ Morris, Meghan. "Travis Kalanick's CloudKitchens faces lawsuits from 3 women over labor issues and deceptive business practices". Business Insider. Retrieved November 14, 2022.
  20. ^ Morris, Meghan. "Restaurant owners are fleeing Travis Kalanick's CloudKitchens". Business Insider. Retrieved November 14, 2022.
  21. ^ McCarthy, Amy (August 23, 2022). "Restaurants Are Jumping Ship From Uber Founder's Ghost Kitchen". Eater. Retrieved November 14, 2022.
  22. ^ Gardizy, Anissa (April 25, 2022). "Ex-Uber CEO Travis Kalanick is bringing his controversial 'ghost kitchen' startup to Boston - The Boston Globe". BostonGlobe.com. Retrieved November 14, 2022.
  23. ^ Roth, Emma (August 23, 2022). "The Uber of ghost kitchens sucks, apparently". The Verge. Retrieved November 14, 2022.
  24. ^ Platt, Eric; Aliaj, Ortenca (September 5, 2023). "Travis Kalanick's start-up CloudKitchens fires staff and shuts sites". Financial Times.
  25. ^ a b c Mike Isaac; David Yaffe-Bellany (August 14, 2019). "The Rise of the Virtual Restaurant". The New York Times. Retrieved June 1, 2021.
  26. ^ Jonah Engel Bromwich (December 24, 2019). "Farm to Table? More Like Ghost Kitchen to Sofa". The New York Times. Retrieved June 1, 2021.
  27. ^ "Ousted Uber cofounder Travis Kalanick has reportedly spent $130 million on his ghost kitchen startup. Here's what it's like inside one of the secretive locations". Business Insider. October 20, 2020. Retrieved June 1, 2021.
  28. ^ "Try Otter: Integrations". tryotter.com. Retrieved June 1, 2021.
  29. ^ a b c d e f g h i j k l m n o p q r s Emilie Friedlander (March 30, 2021). "The Mysterious Case of the F*cking Good Pizza". vice.com. Retrieved June 1, 2021.
  30. ^ a b c Josh Dzieza (June 1, 2021). "The Great Wings Rush". The Verge. Retrieved June 1, 2021.
  31. ^ Meghan Morris; Allana Akhtar (April 23, 2021). "Travis Kalanick's startup refused to change 'Happy Ending' branding for an Asian restaurant menu item, saying it wouldn't cave to woke culture, employees said". Business Insider. Retrieved June 1, 2021.
  32. ^ a b Eric Newcomer (March 11, 2019). "Uber and Travis Kalanick Are in Business Again. This Time, as Competitors". Bloomberg.com. Retrieved June 1, 2021.
  33. ^ Joe Guszkowski (April 1, 2021). "How a virtual brand turned a Chicago brunch spot into a bagel concept". Restaurant Business. Retrieved June 1, 2021.
  34. ^ a b Adrianne Jeffries (September 15, 2020). "What Are Ghost Kitchens". themarkup.org. Retrieved June 1, 2021.
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