Travis Kalanick Raises $400 Million for His New Startup CloudKitchens

Kalanick's new startup CloudKitchens raises $400 million

Ex-Uber CEO and founder Travis Kalanick, has raised $400 million for his new startup CloudKitchens. Kalanick raised the monies in January this year, from Saudi Arabia’s sovereign wealth fund. Kalanick’s startup is a delivery-only restaurant company and probably has a value of $5 billion. The company already operates kitchens in Los Angeles, Chicago and San Francisco, where restaurateurs can access its kitchens with all the required facilities such as sinks, water, electricity and waste disposal.

This is also the first major Saudi investment after the brutal murder of journalist Jamal Khashoggi last year. Uber ousted Kalanick from its C-suite when the company suffered from controversies and scandals. While many businesses have reconsidered their ties with Saudi Arabia, Kalanick does not seem to be the one that will walk away from a hefty investment. It may pay off too, as human memories are transient and business goes on.

What is Kalanick’s New Startup CloudKitchens all about?

As far as the startup is concerned, it might emerge as a rival of Uber Eats, Uber’s food delivery unit. CloudKitchens offers a full kitchen that is custom designed for takeout orders. It allows other restaurants to make deliveries by using its kitchen in a Kitchen as a Service model.

CloudKitchens has its own delivery-only restaurants. As letting other restaurants to use its kitchens is a new concept, it has garnered a lot of interest from the food & beverage industry. Restaurants are often forced to compromise on the quality of dine-in experience just to keep pace with making deliveries as well.

As deliveries are only going to increase, many restaurants may simply not have the infrastructure to juggle between their dine-in customers and delivery orders. CloudKitchens provides such restaurants with the option of dedicating their in-house kitchens for dine-in experiences. They can use CloudKitchens’ facilities solely for the purpose of deliveries.

Why CloudKitchens is poised for success

If food delivery trends are to be discussed, we can safely say that more people order food these days, than they go to a restaurant to dine. This is because, deliveries tend to be cheaper and one can avoid the cost of commute. In larger cities, this may mean saving dozens of dollars and many hours in commute. It’s no wonder then that people wish to order food more than ever before. Restaurants simply will not be able to keep up with the demand.

Restaurants have limited space in their kitchens, and as orders continue to multiply, they simply will not be able to honor them.  Unless, of course, they seek the help of the likes of CloudKitchens. Using the facilities provided by CloudKitchens will help these restaurants to generate an alternate source of income without having to compromise on the dine-in experience they provide.

This may also result in newer jobs, especially in larger cities. In large urban areas, it is common to see food delivery agents zip up and down the streets, all day and night. However, automation may eat into those newer jobs that will be created.

Will CloudKitchens toy with drones and robots to make deliveries?

The delivery business has been around for quite a while now. However, we may soon see drone-based deliveries even in restaurant space. The industry is going through cataclysmic changes, and is expected to metamorphose in the coming years. Back in 2013, we had written that Amazon was trying a drone delivery service. Google too tried a similar drone-based delivery system in Australia. Recently, we wrote about how Yandex is using robotic technology to make deliveries in Moscow.

The new startup CloudKitchens does not mention drones or robots. However, we can safely surmise that a company that is worth $5 billion will definitely want to make more money by automating deliveries.