CloudKitchens explained

CloudKitchens
Type:Subsidiary
Industry:Food industry
Area Served:United States
Services:Virtual restaurant
Owner:Travis Kalanick
Key People:Travis Kalanick (CEO)
Parent:City Storage Systems LLC

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

CloudKitchens offers food preparation facilities for delivery-only food service.[4] The first CloudKitchens warehouse opened in Los Angeles, California.[5]

History

In 2018, Travis Kalanick purchased a controlling stake in City Storage Systems LLC, founded by Diego Berdakin and Sky Dayton,[4] for $150 million, which operates as the parent company of CloudKitchens and is operated by Berdakin and Barak Diskin.[6] [7] This parent company arrangement allows CloudKitchens to operate as a shell company and to keep a level of secrecy or stealth to the startup.[8] [9] [10]

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.[11] 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.[12] [13] [14]

In November 2021, CloudKitchens raised another $850million in a funding round, valuing the company at $15billion.[15] Investors included Microsoft, which previously backed Kalanick's Uber.[16]

In 2022, the company was sued by three of its operators for allegedly violating labor laws and deceptive business practices.[17] According to a report published by Business Insider, over 70% of CloudKitchens' operators left the company within a year.[18] It was also alleged by partners that many facilities lacked property security and food safety measures.[19] [20] [21] 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.[22]

Ghost kitchen operations

A ghost kitchen (or "dark kitchen"[23]) 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.[24] [25] Ghost kitchen partners include:

Otter

CloudKitchens created Otter, a food order platform, which consolidates orders from various platforms (such as Uber Eats, Postmates, Caviar, DoorDash) for kitchens.[26]

Internet Food Court

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.[27]

Future Foods

CloudKitchens' virtual restaurant division is named Future Foods.[28] [29] Virtual restaurant brands (or "pseudo-restaurants"[30]) are the opposite of a ghost kitchen: they allow existing restaurants to deliver food with the Future Foods brands.[31] Future Foods handles marketing including food photography.[32]

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

CloudKitchens brands

Acquisitions and lobbying

It acquired FoodStars BH Ltd, which opened in 2015.

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

Notes and References

  1. Web site: Loizos . Connie . The next big bet for former Uber CEO Travis Kalanick may be cloud kitchens -- in China . TechCrunch . 2019-02-01 . 2023-07-03.
  2. Web site: Avalos . George . Uber co-founder's new company grabs downtown San Jose historic building . The Mercury News . 2018-12-04 . 2023-07-03.
  3. Web site: Microsoft invests in Travis Kalanick's CloudKitchens start-up . Financial Times . 2022-09-07 . 2023-07-03.
  4. Web site: Kemp . Emma . Ghost Ops: Counterfeit Kitchens in the Pandemic Age . 2020-06-17 . 2023-07-03.
  5. Web site: Newberg . Matt . Amidst COVID-19, CloudKitchens Redefines Restaurants As We Know It . HNGRY . 2020-04-06 . 2023-07-03.
  6. Web site: Travis Kalanick is buying a new company that rehabs real estate and will run it as CEO . March 20, 2018 . . Johana . Bhuiyan . Theodore . Schleifer.
  7. Web site: 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. June 1, 2021. Business Insider.
  8. Web site: CloudKitchens Pushes Nationwide Expansion With 40+ Locations . HNGRY . September 10, 2020 . June 1, 2021 .
  9. Web site: Winkler. Rolfe. Jones. Rory. November 7, 2019. Meet Travis Kalanick's Secret Startup, CloudKitchens. June 1, 2021. WSJ.
  10. Web site: Uber Founder Turns Real-Estate Mogul for Ghost Kitchen Startup . Putzier . Konrad . WSJ . October 20, 2020 . June 1, 2021 .
  11. Web site: Saudis Back Travis Kalanick's New Startup . Jones . Rory . Winkler . Rolfe . WSJ . November 7, 2019 . June 1, 2021 .
  12. News: Top tech execs will help Saudi Arabia build its mega city of the future . CNN . October 11, 2018 . October 13, 2018 . October 13, 2018 . https://web.archive.org/web/20181013141328/https://edition.cnn.com/2018/10/10/tech/neom-city-investors/index.html . live .
  13. News: Some Silicon Valley Superstars Ditch Saudi Advisory Board After Khashoggi Disappearance, Some Stay Silent . The Intercept . October 12, 2018 . October 13, 2018 . March 31, 2019 . https://web.archive.org/web/20190331220041/https://theintercept.com/2018/10/11/some-silicon-valley-superstars-ditching-saudi-advisory-board-after-khashoggi-disappearance-some-stay-silent/ . live .
  14. Web site: 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. . Graham Rapier . Business Insider . November 7, 2019 . June 1, 2021 .
  15. Web site: Travis Kalanick's food startup CloudKitchens has tripled its valuation to $15 billion and tapped an Amazon veteran as CFO . January 5, 2022 . . Meghan . Morris . subscription . https://web.archive.org/web/20220826224537/https://www.businessinsider.com/travis-kalanick-cloudkitchens-triples-valuation-to-15-billion-2021-11 . August 26, 2022 . live.
  16. Web site: Microsoft invests in Travis Kalanick's CloudKitchens start-up . September 7, 2022 . . Dave . Lee . Tim . Bradshaw.
  17. Web site: Morris . Meghan . Travis Kalanick's CloudKitchens faces lawsuits from 3 women over labor issues and deceptive business practices . November 14, 2022 . Business Insider . en-US.
  18. Web site: Morris . Meghan . Restaurant owners are fleeing Travis Kalanick's CloudKitchens . November 14, 2022 . Business Insider . en-US.
  19. Web site: McCarthy . Amy . August 23, 2022 . Restaurants Are Jumping Ship From Uber Founder's Ghost Kitchen . November 14, 2022 . Eater . en.
  20. Web site: Gardizy . Anissa . April 25, 2022 . Ex-Uber CEO Travis Kalanick is bringing his controversial 'ghost kitchen' startup to Boston - The Boston Globe . November 14, 2022 . BostonGlobe.com . en-US.
  21. Web site: Roth . Emma . August 23, 2022 . The Uber of ghost kitchens sucks, apparently . November 14, 2022 . The Verge . en-US.
  22. News: Platt . Eric . Aliaj . Ortenca . September 5, 2023 . Travis Kalanick's start-up CloudKitchens fires staff and shuts sites . Financial Times.
  23. Web site: Uber Founder Travis Kalanick Leaves Board, Severing Last Tie. Kate Conger . . December 24, 2019 . June 1, 2021 .
  24. Web site: Farm to Table? More Like Ghost Kitchen to Sofa . Jonah Engel Bromwich . . December 24, 2019 . June 1, 2021 .
  25. Web site: 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 . June 1, 2021 .
  26. Web site: Try Otter: Integrations . tryotter.com . June 1, 2021 .
  27. Web site: Amidst COVID-19, CloudKitchens Redefines Restaurants As We Know It . Patrick Fallon . HNGRY . April 5, 2020 . June 1, 2021 .
  28. Web site: The Great Wings Rush . Josh Dzieza . The Verge . June 1, 2021 . June 1, 2021 .
  29. Web site: 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 . Meghan Morris . Allana Akhtar . Business Insider . April 23, 2021 . June 1, 2021 .
  30. Web site: Eric Newcomer. March 11, 2019. Uber and Travis Kalanick Are in Business Again. This Time, as Competitors. June 1, 2021. Bloomberg.com.
  31. Web site: The Rise of the Virtual Restaurant. Mike Isaac . David Yaffe-Bellany . . August 14, 2019 . June 1, 2021 .
  32. Web site: How a virtual brand turned a Chicago brunch spot into a bagel concept . Joe Guszkowski . Restaurant Business . April 1, 2021 . June 1, 2021 .
  33. Web site: The Mysterious Case of the F*cking Good Pizza . Emilie Friedlander . vice.com . March 30, 2021 . June 1, 2021 .
  34. Web site: What Are Ghost Kitchens . Adrianne Jeffries . themarkup.org . September 15, 2020 . June 1, 2021 .

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "CloudKitchens".

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