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Daily news and analysis about the food tech revolution

iKcon

iKcon Raises $20M to Expand Its Ghost Kitchen Network

Ghost kitchen provider iKcon announced over the weekend that it has raised $20 million in Series A funding. The round was led by Mohamed Yousuf Naghi Group, AlTouq Group, Derayah Ventures, B&Y Venture Partners, AbdulMohsin Al Houkair Holding Group, and Nazer Group. and brings iKcon’s total funding to date to $32 million.

Dubai-based iKcon, which was founded in 2019, says it will use the new funds to expand the company’s ghost-kitchen-as-a-service model to new markets, starting with Saudi Arabia. Currently, iKcon operates 15 cloud kitchens across the United Arab Emirates; it plans to grow that number to 50.

The iKcon model differs a little bit from many ghost kitchen operations in that it handles everything for restaurants, from staffing to cooking to actually delivering the food. In the company’s own words, it “acts as a franchisee” on behalf of the restaurant, and provides services for both brick-and-mortar brands as well as virtual ones. (Kitopi is another notable example of a ghost kitchen network using this model.)

Its proprietary tech stack is another important selling point of iKcon’s business. Part of the company’s funding will go towards further building out the technology side of the ghost kitchen, focusing specifically on those tools that can automate more processes and in doing so ensure better quality and consistency of the food as well as faster speed of order times.

Those elements are important for a ghost kitchen that’s acting as a franchisee for the restaurant. Under this model, restaurants part with a lot of control over their food and brand, since they’re not the ones actually cooking and fulfilling the orders. Being able to assure those restaurants that a high-quality, consistently good product will arrive to customers on time will be an important point for iKcon to get right as it expands into new markets.

Ghost Kitchen Network Virtual Kitchen Raises $20M

Virtual Kitchen, a company founded by two ex-Uber executives, has raised $20 million in new funding, according to a filing with the SEC (h/t Restaurant Dive). The round was led by Founders Fund and brings Virtual Kitchen’s total funding to $37 million. 

Virtual Kitchen runs multiple “delivery-optimized kitchens” where restaurants can rent space and also take advantage of the company’s technology to scale up operations quickly. Delivery fulfillment is done through partnerships with Grubhub, Uber Eats, Postmates, DoorDash and other third-party services. 

It’s unclear at this time what Virtual Kitchen will do with the new funds, though Restaurant Dive suggests the San Francisco-based company is likely to focus on expanding its network of ghost kitchens.

Now would certainly be the time to do that. As we detailed in a recent Spoon Plus report, the market for ghost kitchens is enormous — trekking towards $1 trillion by some accounts. As a business model, the ghost kitchen was already becoming an attractive option for more and more restaurants before the COVID-19 pandemic ever hit and decimated the restaurant industry. Since then, delivery and other off-premises formats have become priorities for large chains and mom-and-pop joints alike, and there’s no setting more logical for fulfilling all these to-go orders than a ghost kitchen. 

Given all that, the recent activity in the ghost kitchen space shouldn’t surprise. Kitchen United continues to expand across the U.S. Kitopi raised $20 million this year. Zuul raised $9 million for its NYC-focused ghost kitchen operation, Dubai-based iKcon raised $5 million, and that’s but a smattering of the recent developments in this sector. 

Virtual Kitchen’s new funding follows last year’s $15 million investment from Andreessen Horowitz and Base10 Partners. 

iKcon Raises a $5M Pre-Seed Round for Its Ghost Kitchen Network

Cloud kitchen startup iKcon announced today it has raised a $5 million pre-seed round led by Arzan VC, AlTouq Group and Nazer Group. This brings iKcon’s total funding to $10 million. 

The Dubai-based company, founded in 2019 by CEO Khalid Baareh and COO Kareem Abughazaleh (pictured above), operates a network of 10 cloud kitchens across the United Arab Emirates.

The company says it “acts as a franchisee” on behalf of restaurant brands, catering to both chains with existing brick-and-mortar operations as well as delivery-only virtual restaurants. iKcon’s kitchens also provide space for some CPG brands. 

Besides expanding its kitchen network, iKcon notes it will also use the new funds to further develop its proprietary technology platform, which it says uses AI and data analytics to improve operations in the kitchen. 

That tech will be an important differentiator for cloud kitchen companies across the board to improve as time goes on. For all their promises of low overhead costs and streamlined setups, cloud kitchens are still operationally intensive businesses that rely on lots of humans to cook, package, and deliver the food. With many restaurants around the world in danger of shuttering permanently because of the pandemic, delivery-only brands look more promising every week for some businesses. And as we discussed in our recent Spoon Plus Guide to Ghost Kitchens, the industry as a whole is moving towards more tech and automation to bring down costs, whether they’re time, money, or resources.

The cloud kitchen market itself is inching towards $1 trillion by 2030. iKcon’s fundraise is just the latest, following Zuul’s $9 million round and Kitopi’s $60 million fundraise.

For its part, iKcon says says it plans to expand to Saudi Arabia in the fourth quarter of 2020 and to other countries in 2021.