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CloudKitchens

June 29, 2024

Scoop: Kalanick’s Latest Idea for Disrupting Food May Be No-Fee Bulk Food Delivery & Automated Pick-Up Kiosks

When Travis Kalanick showed up at the Food on Demand conference this past May, technology and restaurant industry insiders could hardly believe it.

After all, the Uber cofounder had gained an almost Howard Hughes-like reputation for secrecy over the past decade, saying nary a word publicly over the years while journalists and Internet sleuths searched for digital breadcrumbs about what exactly he was up to with CloudKitchens, a business under which he had quietly built the biggest network of dark kitchen/ghost kitchen facilities in the country.

But unlike the eccentric aerospace and film magnate who spent his days toggling between locking himself away in screening rooms and crashing planes, Kalanick made clear on stage in Las Vegas last month that he’s been busy building a new business empire focused on reimagining the world of restaurants and food delivery.

“Can you do to the kitchen what Uber did to the car?” he asked. From there, Kalanick painted a vision of how the companies he’d assembled under his City Storage Systems holding company would do things differently. He suggested the sum total of his collected companies – such as shared/dark kitchens (CloudKitchens), Point of Sale software (Otter), and restaurant automation (Lab37) – could power a more efficient way of doing business than the disjointed, expensive, and fee-ridden state the restaurant and food delivery business had evolved into over the past decade.

It was during his talk that Kalanick talked up the idea of an ‘Intenet Food Court,’ where customers could get a hyper-personalized experience and order any type of food within 15 minutes. To realize that vision, Kalanick said food production and logistics would need to be automated, and his company was building the necessary infrastructure under City Storage Systems to deliver that.

“We paint where this all goes, but there’s a road to get there and we call it infrastructure for better food,” he continued. “That’s the mission of my company.”

Kalanick’s refererence to the concept of an Internet or digital food court was not the first signal from him or his company about the concept. In fact, in 2020, the company launched what it described as an Internet food court in the LA market, where it would aggregate all the food operators in the Koreatown facility and offer multi-tenant ordering. They even had a website URL, Internetfoodcourt.co. However, as of April 2020, the site had gone dead, and CloudKitchens had scrubbed its Internet presence of the term.

But then, in March of this year, the company started talking digital food courts again. That month, it posted a story on its blog about the launch of a Picnic-branded digital food court platform in Chicago. The location, which was formerly called Avondale Food Pickup before it was renamed Picnic, featured what the post described as a new digital platform that would enable a customer to order food on a new website (picnicfood.com) or in person via a kiosk or a human worker and then they would be able to pick up the food via a pick-up locker.

The pickup kiosk can be seen below:

The website for this Picnic shows you can ask for delivery or pickup, and currently the only location for pickup is the Chicago address in Avondale, and a Google search seems to indicate this was the first and only time Kalanick’s company had used the Picnic branding and the concept of a digital food hall since 2020.

And then earlier this week, what appears to be another version of the same Picnic company (same logo, different website) showed up on Linkedin and talked up a new platform concept in the Los Angeles market. The pitch? A ‘digital food hall’ and fee-free multi-brand delivery of food to different places of business or residential multi-family units. The concept, which is explained in the video below, is essentially bulk orders to various office buildings, schools, or wherever hungry people convene together each day.

According to the explainer video and the website, a Picnic “activation” starts with a location manager or employee/resident applying to be a Picnic delivery location. Once accepted, Picnic will put what it describes as a Picnic “shelf” at the location where the different individual meals are placed during a delivery.

This new Picnic doesn’t state anywhere on its website or on Linkedin that it’s a part of City Storage Systems’ network. The website‘s FAQ describes the company as a product of coworkers in the California market “who realized that it’s nearly impossible to find consistent lunch options that have variety,” and when The Spoon reached someone via a number found on the company’s Linkedin page, the person told us the company was not associated with CloudKitchens or City Storage Systems.

But we are confident it is for a couple of obvious reasons: Not only does it use the same logo as the CloudKitchens Picnic offering in Chicago, but the location’s address at 777 S Figueroa in Los Angeles is listed in multiple locations as being the same address as City Storage Systems.

Which, of course, raises all sorts of questions. For example, is this version of Picnic – a platform for bulk-ordered delivery of food to places of work and multi-family living – going to be the next big idea from Kalanick’s company? And does this mean the company is building out its own delivery network? And will Kalanick & Co roll out the digital food court and automated pick-up kiosks (such as that in Picnic Chicago) to its other ghost kitchen locations across the country?

A new delivery network would certainly be an interesting move for a founder who is largely responsible for not only reshaping personalized transportation with Uber and building the infrastructure for one of the biggest third party meal delivery companies in UberEats.

Finally, it also needs to be asked: Why Picnic? There are already a couple other Picnics in the food tech space, including Picnic in Seattle which makes pizza robots, and the grocery tech startup named Picnic out of The Netherlands. It seems like a curious move, especially since the US Trademark office awarded a trademark to the Seattle-based Picnic (their corporate name is Picnic Works) to use the term Picnic.

If you have any insights or leads on what else City Storage Systems is planning to do with its Picnic platform (either the centralized pickup Internet food hall concept or the bulk-delivery concept), drop us a line.

December 4, 2023

Scoop: Travis Kalanick is Building Restaurant Robots With Help of Uber’s Former Head of Self-Driving Cars

For the past half-decade, former Uber CEO Travis Kalanick has been endeavoring to reimagine how restaurants operate by building a nationwide network of ghost kitchens under a business called CloudKitchens. That business, which he and his team constructed stealthily under a holding company called City Storage Systems (CSS), was joined at the hip by another technology business called Otter, which sells restaurant order management software.

Now, the Spoon has learned that Kalanick’s CSS is building its own restaurant automation and robotics business under the name Lab37. According to company sources and a blog post quietly published by the company in September, Lab37 has built its first restaurant robot, a bowl-making robot called (what else?) Bowl Builder.

The Bowl Builder, which makes hundreds of hot or cold bowls per day, is fully NSF-certified and its dimensions are 20′ wide by 9′ deep. The system can handle the entire process of making bowl food, as bowls run on a conveyor belt under 18 different dispenser modules for ingredients and sauces before getting sealed, utensils added, and bagged up for pickup.

The Spoon has learned that Lab37 is headed up by Eric Meyhofer, an executive and automation innovator who formerly ran Uber’s self-driving car unit for years (and racked up quite a few patents during that time). Meyhofer, who is listed on LinkedIn as a co-founder of Carnegie Robotics – a robotics development lab that helped to give birth to Uber’s self-driving car unit – also served as a commercialization specialist at Carnegie Melon University, his alma mater and widely recognized as the world’s leading robotics research university. Meyhofer does not list Lab37 on his LinkedIn profile.

Lab37 is located in a warehouse on the outskirts of Pittsburgh. The location includes a commercial research and development kitchen, fabrication shop, engineering office, electrical engineering lab, assembly lab, and testing lab.

Lab37 has been trialing the Bowl Builder out through its Hungry Group virtual restaurant division, which is described as a R&D kitchen company building “the future of dining, where diverse options, cutting-edge convenience, and technology unite.” According to the company, the Hungry Group’s R&D kitchen is in the same warehouse where the Bowl Builder food robot was designed, tested, and assembled.

The Spoon has learned that the early trials with the Bowl Builder have gone very well, and locations that have tried it out have seen substantial increases in revenue. According to a Lab37 spokesperson, the company plans to trial the Bowl Builder in additional locations in the coming months, including more CloudKitchen locations.

One potential customer of Lab37’s Bowl Builder is Salted, a fast-growing bowl-food startup that has leaned heavily into the ghost kitchen model in recent years. While Salted has several physical brick-and-mortar locations, its CEO, Jeff Applebaum, has indicated that much of the company’s future growth will come via ghost kitchens. The Spoon has learned that Salted is a customer at a number of CloudKitchen’s locations.

Interestingly, this news comes just a few weeks after Spain-based Remy Robotics announced they were also working with CloudKitchens for its US entry. The Remy robot, which uses a robotic arm and looks to have a smaller footprint than Lab37’s Bowl Builder, debuted in the US under Remy’s Better Days virtual restaurant brand in the New York City market.

Stepping back, this latest revelation about Kalanick’s push into food automation shows his current journey is not too dissimilar from the one he took with Uber. As with his former company, Kalanick is moving from a startup concept that rethinks the traditional usage model of a long-standing industry (it was taxis and travel with Uber, and now it’s restaurants with CSS) and is building enabling technology as the second (or third) act to help realize this vision. He’s using the well-worn tech industry playbook of building “picks and shovels” for an industry, but only after spending time showing the industry there’s a way of doing things that’s is much different than the long-standing model.

November 5, 2021

Dallas Chef Offers A Fearless Approach to Her Vegan Ghost Kitchen

For Dallas chef Lori Moore, operating her new business, Vspot, out of what is commonly called a “ghost kitchen” is no figment of anyone’s imagination. Her vegan-inspired menu evolved from her fanciful passion for food, but Lori’s lunch and dinner spot is the result of years of training, hard work, and planning. In her case, the “ghost” part of the equation is more of a conscious choice than a need to follow a growing trend.

“I was always that weird kid that loved veggies,” Moore said in a recent interview with The Spoon. After graduating from Dallas’ Le Cordon Bleu College of Culinary Arts in 2011, Lori toyed with the idea of opening a vegan food truck. Still, the cloud kitchen concept allowed her to focus more on cooking and less on infrastructure.

In order to avoid tackling complex technology on her own, Moore took advantage of a platform offered by Los Angeles-based CloudKitchens, a company founded by Diego Berdakin in 2016. Key features of CloudKitchehn are tools that allow Moore to track orders and work with suppliers. The consumer-facing process starts with Flipdish, a seperate technology, that takes customer orders, which are sent to the kitchen owner for fulfillment. Next in line is Otter, an AI-based technology, which seamlessly connects to various delivery options, including Uber Eats, Door Dash, Caviar, and Grubhub.

“Using the technology of a cloud kitchen, it takes care of the technology that is out of my range,” Moore said. “It lets me do what I do best—cook.

Before starting Vspot, Moore offered meal prep, which gave customers menu options in advance that the Dallas chef would prepare for her clients to pick up. Her weekly menu would include five different choices for lunch and five for dinner.

Moore’s decision to focus on vegan food was partially based on her food preferences and appealing to the North Texas’ growing interest in plant-based foods, which was aligned to her community becoming more health-conscious during the COVID-19 pandemic. The commissary where she does all her cooking is in Trinity Grove, near the downtown area, where many of her regulars live.

“Many people are intimidated by the idea of being vegan,” she said, commenting that many are shocked when they order and enjoy a vegan burger. “They can’t believe it’s vegan and can’t wrap their head around it.”

Between 75% and 80% of her food is made from scratch, with such items and burgers, cheese, chicken, and buns provided by a local purveyor. Listening to what she jokingly calls “voices in her head,” Moore hopes to add soups and other staples to her roster of vegan offerings.

As with most successful upstart food companies, Moore is a heavy user of social media leaning on Instagram to whet people’s appetite with pictures and videos of her burgers (Impossible Burger), vegan chicken sandwiches, sides, and desserts.

The cloud/ghost kitchen concept fits Moore’s vision to a T. She refuses to be satisfied with her single location in Dallas, hoping to expand her idea across the country. She would find a place for the cloud kitchen and train people to handle the food prep in order to carry out that vision. Of course, leaning heavily on her model of using Flipdish and CloudKitchens for the required tech muscle would be a significant key towards achieving her long-term goal.

Lori Moore is not alone in seeing the power and profit of vegan-themed cloud kitchens. Aside from startups in China and India, there are Souley Vegan, based in Oakland; Good Vibes in Sacramento; Qusqo Bistro in Los Angeles, and Los Angeles-based Plant Nation.

June 7, 2021

Oakland Residents Push Back Against a Forthcoming CloudKitchens Location, Citing Trash, Traffic, and Parking Issues

Residents of Oakland, California are pushing back against the opening of a new ghost kitchen location from Travis Kalanick’s super-secretive CloudKitchens company (h/t Berkeleyside). The facility is slated to open in July. But in an online petition, residents argue that the city of Oakland issued permits for the building quickly “without public notice or any consideration of the impacts on our neighborhood.”

The planned CloudKitchens facility at 5325 Adeline St. in North Oakland will house space for 35 commercial kitchen spaces, which is huge by ghost kitchen standards. The kitchens would operate seven days per week, 18 hours per day, according to the online petition. 

Those opposed include the Golden Gate Community Association and the Oakland Neighborhoods for Equity. These groups as well as residents of the North Oakland neighborhood are pushing for a freeze on construction at the forthcoming CloudKitchens location until the city can address a list of concerns around having a massive ghost kitchen facility in the area. That includes more traffic from the assumed influx of drivers that will be coming and going from CloudKitchens, a loss of parking for neighborhood residents, and “a more dangerous Adeline Street” because of these things. The petition also cites noise, exhaust, odors, and pests as other potential problems. 

This is not the first time CloudKitchens has gotten pushback from residents of a city. Earlier this year, those in Chicago’s North Center neighborhood complained of traffic, parking, and garbage issues from the CloudKitchens facility that opened in 2020. The city finally intervened, but only after police recorded numerous parking violations , calls for disturbance, and crashes in the span of three months.

Nor is this the first time the issue of ghost kitchens’ impact on surrounding neighborhoods come up. As the format has grown in popularity over the last year or so, restaurants, kitchen operators, and city residents alike have surfaced the discussion about the impact of these facilities on daily life and local business, not to mention basic safety on the streets. Talks stand to get even more nuanced as major ghost kitchen operators like CloudKitchens expand and more restaurant chains redesign their store formats to accommodate the uptick in pickup, delivery, and drive-thru orders.

Oakland residents are asking their city to delay the CloudKitchen’s opening as well as its number of food businesses and hours of operation.

October 20, 2020

New WSJ Report Shows How Much CloudKitchens Has Spent on Real Estate and Where

CloudKitchens, the secretive ghost kitchen startup founded by ex-Uber CEO Travis Kalanick, has purchased more than 40 real estate properties across two dozen cities for more than $130 million, according to a report in The Wall Street Journal.

The Journal analyzed a number of different limited-liability companies, tracing their origins back to the business addresses of City Storage Systems, the parent company of CloudKitchens.

CloudKitchens has been notoriously secretive about its operations, and the Journal’s work not only gives us a glimpse into how much the company is spending, but where it could potentially be setting up ghost kitchen operations.

Ghost kitchens are centralized commercial kitchen spaces for restaurants to fulfill off-premises and delivery-only restaurant concepts. They have all the infrastructure needed for a restaurant to prepare food and serve as a delivery hub, without any of the additional overhead that comes with dine-in eating.

According to the Journal’s analysis, it looks like CloudKitchens has acquired buildings in:

  • Portland, OR
  • Las Vegas, NV
  • Columbus, OH
  • Memphis, TN
  • Nashville, TN
  • Miami Beach, FL
  • Queens, NY
  • Los Angeles, CA
  • Seattle, WA

As the Journal notes, CloudKitchens doesn’t say much about its business, including its locations. The company has evidently been just as hush-hush during these real estate transactions and not directly identifying itself with some sellers.

The Journal article is worth highlighting because it gives us some sense of just how big CloudKitchens is and could get. The ghost kitchen market is expected by some to hit as high as $1 trillion by 2030, and there are already a number of players in the space including Kitchen United, Zuul, Yummy and more (see our Ghost Kitchen market map for more). But if CloudKitchens has already attained national level reach, then it could be poised to quickly dominate the space.

Though CloudKitchens has reportedly spent $130 million on real estate, the company raised $400 million from Saudi Arabia’s sovereign-wealth fund last year. And given Kalanick’s track record with Uber, chances are good it could easily raise more.

With the pandemic still in full swing around the planet, the restaurant biz will still need to rely on delivery to stay afloat. Ghost kitchens will play an increasingly important part of that survival plan.

For more on ghost kitchens, you should read The Spoon Plus Guide to Ghost Kitchens (membership required), which outlines where the market has been and where it’s going.

December 29, 2019

3 Predictions for the Ghost Kitchen in 2020

In 2019, the idea of a restaurant kitchen with no dining room that would exist solely for the purpose of fulfilling off-premises orders was an intriguing but little-known concept. Fast forward 12 months, and ghost kitchens are now a major talking point in the discussion around how to meet customer demand for delivery and takeout orders. And it’s not just restaurants getting involved. Third-party delivery services like DoorDash have opened their own ghost kitchen facilities, companies like Kitchen United, who provide kitchen infrastructure to other brands, are expanding across the globe, and even non-restaurant food brands are capitalizing on the craze.

It’s still early days for the ghost kitchen concept, and as I noted with The Spoon’s most recent market map, this is a part of the restaurant industry that will change rapidly over the next year as it becomes more commonplace among both restaurants and consumers.

Here are a few things we expect to see happen in 2020.

Ghost kitchens will become the norm for large restaurant chains. 
Last year around this time, I wrote that “where the [ghost kitchen] concept could really shine in 2019 is by taking on delivery orders for existing businesses, so the brick-and-mortar locations of those restaurants don’t have to shoulder the entire burden.”

Without a shadow of a doubt, that began to happen in 2019. In 2020, it will become the norm. Many early adopters of the ghost kitchen concept in 2019 were national or international chain restaurants with the kind of reach and influence that will compel other establishments to take similar steps. Chick-fil-A already rents space from DoorDash’s ghost kitchen facility. Starbucks has teamed up with Alibaba’s Heme supermarkets in China to run ghost kitchens out of the latter’s stores. The coffee giant is also building out its own express stores that will function largely as ghost kitchens for delivery orders. Fat Brands is using its own kitchens to double as ghost kitchens for sister brands.

All of which is to say, many brands will create many iterations of the ghost kitchen concept in 2020. As we move though the next 12 months, which types of ghost kitchens (commissary, in-house, etc.) make the most sense for which brands will become clearer. 

Restaurant brands will compete with their kitchen providers.
Both large chains and virtual restaurant concepts will quite possibly find a new competitor in 2020: the folks renting out the kitchen space they use.

Much like grocery stores display their own brand of pasta on the shelves along side CPG brands (or, for a more web-friendly parallel, Amazon has its own Amazon Basics brand), ghost kitchen providers will start to use their facilities to house their own virtual restaurant concepts that compete with those of their tenants. 

This is already happening. Travis Kalanick’s CloudKitchens startup, which operates a network of ghost kitchen facilities, provides space for brands like Sweetgreen to fulfill off-premises orders. It also houses its own virtual brands like Excuse My French Toast and B*tch Don’t Grill My Cheese. 

Not all kitchen providers will take this route. For example, Kitchen United said recently it did not want to be a restaurant itself.

But for many kitchen providers, offering their own virtual restaurants allows them to own yet-another piece of the restaurant stack and therefore more revenue and the all-important customer data. And as more and more non-restaurant food brands, from diets to celebrity chefs, try out virtual concepts, launching a virtual restaurant will (in theory, at least) get simpler for these kitchen providers to do without incurring much additional overhead. No, B*tch Don’t Grill My Cheese won’t stand a chance against a big brand like Chick-fil-A if a customer is really craving those waffle fries, but in the future, the two entities won’t be working out of the same ghost kitchen facility anyway.

Which leads us to our next point.

Third-party delivery services will open more kitchens. Big brands will follow.
Remember above when I said we’ll see an explosion of big-name restaurant brands adopting the ghost kitchen model? At some point in the future, most of them will be doing it out of kitchens run by third-party delivery services like DoorDash and Uber Eats. That’s not because providers like Kitchen United don’t offer delivery options (they do), but because the delivery companies themselves are approaching the restaurant chains.

DoorDash is a case in point. When the third-party delivery service opened the doors on its own ghost kitchen facility in Redwood City, CA this year, it had four existing restaurant chains onboard — all of whom it approached because the company had user data that said people were looking for that type of food in the California Peninsula area. Chick-fil-A soon signed a lease for exactly the same reason.

This is almost a no-brainer. Restaurants already working with delivery companies use these services for things like marketing, technical fulfillment, and last-mile logistics. Adding kitchen space to the stack seems almost a foregone conclusion.

The other thing ghost kitchens are likely to encounter at some point in 2020 is a reality check. At the moment, optimism is flowing into the sector alongside the millions in capital companies are raising. Soon enough, though, the questions will start pouring in. Who gets to own the customer data? Can ghost kitchens become sustainable or will they just pile more trash into the ocean via takeout boxes? Is the model actually profitable, and for whom? Expect these and many other questions to surface in the next year as the ghost kitchen goes mainstream. 

December 26, 2019

What Does Travis Kalanick’s Departure from Uber Mean for the Cloud Kitchen Space?

Just before Christmas, it was announced that Travis Kalanick, the founder and former CEO of Uber, will be leaving that company’s board of directors at the end of this month. Additionally, Kalanick has reportedly sold all of his Uber stock for roughly $2.7 billion.

In the press announcement, Kalanick said “it seems like the right moment for me to focus on my current business and philanthropic pursuits.” One of those business pursuits is CloudKitchens, his secretive startup that does exactly as its name implies; it creates physical kitchen infrastructure locations for delivery-only restaurants. These restaurants can be delivery extensions of existing brands, or virtual restaurants that exist only within a delivery app. CloudKitchens is even creating their own virtual restaurants.

Kalanick’s new calling, however, created a conflict of interest for him and Uber given that Uber Eats has its own potential cloud kitchen and virtual restaurant ambitions. So Kalanick’s departure from Uber’s board isn’t a huge surprise.

As for why Kalanick sold off all his shares in the company he helped build into the juggernaut it is today, who knows exactly what message he is trying to send. Has he lost faith in Uber, which continues to hemorrhage money? Did Kalanick pull a Steve Jobs in selling off shares from the company that ousted him?

What we are more interested in here at The Spoon is what Kalanick is going to do next with CloudKitchens now that he has a bunch of cash and time to focus on it. The cloud/ghost/dark kitchen landscape is one that we watch closely (check out our market map on the topic). CloudKitchens already reportedly raised $400 million from Saudi Arabia’s Public Investment Fund, so money wasn’t necessarily an issue for the startup. Especially considering that rivals like Kitchen United and Virtual Kitchen Co. have only raised $50 million and $15 million respectively.

Kalanick has proven his ability to ruthlessly build an empire before. Freed from any ties to Uber, we’ll now be watching to see how quickly Kalanick expands CloudKitchens. Will he relax the CIA-like levels of secrecy around the company? Will he expand rapidly across the country? Will he launch any new innovations? How will he spur his rivals into action?

One thing is for certain; we’ll be writing a lot about Kalanick and cloud kitchens in the coming year.

December 11, 2019

Newsletter: What Comes Next for Ghost Kitchens? Plus, Third-party Delivery and At-home Agtech

This is the web version of our weekly newsletter. Sign up for it and get all the best food tech news delivered directly to your inbox each week!

I’m not gonna lie: putting together our market map on ghost kitchens was hard. The concept as we know it is relatively new, and the lines between the different categories of ghost kitchen might be easy enough to draw in a graphic but are never as solid in real life. For example, CloudKitchens provides kitchen space but it’s also a network of virtual restaurants. Starbucks runs its own kitchens but relies on Alibaba’s Heme supermarkets to provide the space. Grubhub, Uber Eats, and DoorDash deliver food but also operate in other areas of the stack.

That overlap, though, is a big part of what makes this area of the restaurant industry such an interesting one to watch. Not only is the 2019 ghost kitchen redefining the restaurant experience as we know it, it’s also redefining the way restaurants operate, the technology they use to do that, and even what their menus offer in any given area. Fat Brands, for example, uses Fatburger locations on the West Coast to also fulfill delivery-only orders for sister brands that would normally only be available to customers in the East. 

As we head into the next year, we can expect the overlap of companies and categories to increase as more multi-unit chains try their hand at ghost kitchens, more kitchen infrastructure providers try out their own virtual restaurants, and literal mobility (kitchens on wheels) becomes more commonplace. 

Head over to The Spoon for more predictions on what comes next for ghost kitchens (RIP POS?) and to download the map. And since this is such a nascent market that changes weekly, expect more iterations of this map to hit your inbox in the future.

Third-party delivery is staying put. Sort of.
It’s no secret that consumer appetite for delivery is driving the growth of off-premises orders. And while they may be controversial, third-party services like DoorDash and Postmates are a big part of this growth.

The biggest part, by some accounts. This week, CBRE Group noted in a new report that 70 percent of delivery orders will come from third parties by 2022. That’s a no-brainer. These services provide the tech infrastructure, logistics, and actual drivers that are often too expensive for restaurants to operate on their own. Third-party delivery may be expensive for restaurants and paddling through a sea of bad press lately, but it is in many ways necessary for businesses who want (need, actually) to offer off-premises ordering for customers. 

Like ghost kitchens, this is a messy, fast-changing market whose model will continue to evolve as restaurants adopt hybrid strategies and new laws are passed regulating how these companies do business.  

At-home vertical farms: Big convenience or big expense?
If you still prefer the old-fashioned method of actually cooking food for yourself, Miele’s latest news will be of some interest. As my colleague Chris Albrecht reported this week, the German appliance-maker known for everything from washing machines to coffee systems has acquired Agrilution, a Munich, Germany-based agtech startup known for its Plantcube indoor vertical farm. 

As Chris notes, the Plantcube looks like one of those at-home wine fridges, and like any vertical farm uses software to regulate temperature, climate, water levels, and nutrient delivery to crops. The system grows a variety of leafy greens and fits right inside your existing kitchen infrastructure. 

Question is, Do people want vertical farms built into their kitchens?

Potentially.

No, setting up a grow system in your home is not as convenient as buying a bag of kale from the store. For those so inclined, though, an at-home vertical farm like Agrilution’s means being able to pick fresh, better tasting ones right out of their own cabinetry. Those living in dense urban areas, where the fire escape is the closest thing to outdoor space, could have an actual at-home garden.

First, though, we have to get over the cost hurdle. Right now, price points of various at-home vertical farming systems go for anywhere between roughly $500 (Ponix Systems) and $3,000-plus (Miele). What we don’t have is abundant data on how much these farms cost consumers in terms of electricity, water, or repairs if the system breaks down. There is also the issue of space. Agrilution’s Plantcube may fit nicely into the under-counter space of a single-family home in Nashville. Your average New York apartment, on the other hand, would be hard-pressed to accommodate one.

Still, it’s a great sign that a major appliance-maker like Miele is showing interest in getting cabinet-to-table greens to more homes in the future.

Until next time,

Jenn

November 7, 2019

Report: Saudis Pour $400M Into Travis Kalanick’s Ghost Kitchen Startup

Saudi Arabia’s sovereign-wealth-fund invested $400 million into Travis Kalanick’s CloudKitchens startup, according to a new report by The Wall Street Journal. The fund’s agreement was completed in January and could value CloudKitchens at $5 billion.

The sovereign-wealth-investor was also an early backer of Uber, which means Kalanick, who was ousted from the latter in 2017, is reunited with a former investor.

Like Kitchen United, Zuul Kitchens, and others, CloudKitchens operates a network of ghost kitchens facilities restaurants can use to fulfill delivery orders placed via DoorDash, Grubhub, etc. The company also has several of its own delivery-only restaurant concepts, which it also runs out of these kitchens.

According to the WSJ’s sources, the sovereign-wealth-fund, known as Saudi Arabia’s Public Investment Fund (PIF), has helped CloudKitchens expand around the globe, including multiple U.S. cities as well as China, India, and the UK. A spokesman for PIF declined to comment to the WSJ on the story.

The deal had reportedly been in the works since 2018, when Kalanick started discussing it with PIF’s governor Yasir al-Rumayyan, who also sits on the board of Uber. It’s also one that’s steeped in controversy, given the murder of journalist Jamal Khashoggi. The investment in CloudKitchens is the PIF’s first known deal in Silicon Valley since Khashoggi’s killing, according to the WSJ.

On its website, CloudKitchens promises potential restaurant parters things like lower upfront and operational costs. The site lists just seven restaurant brands the company works with and precious-little information in terms of where CloudKitchens actually operates facilities. Secrecy seems to be the name of the game when it comes to how Kalanick runs this business. The company forbids employees to list any affiliation with CloudKitchens in their LinkedIn profiles, and Kalanick himself doesn’t grant interviews on the topic. In that sense, keeping a $400 million investment from a controversial alliance is right in line with how CloudKitchens is choosing to run its business. According to the WSJ, the investment has been “closely guarded” and known to just a few executives at CloudKitchens.

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