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The Spoon

Daily news and analysis about the food tech revolution

Travis Kalanick

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.

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.