Saudi Government Fund Invests $400M In Former Uber CEO’s Restaurant Real Estate Startup
Saudi Arabia’s $320B sovereign wealth fund has invested in a startup created by former Uber Chief Executive Travis Kalanick which buys real estate and builds out dark kitchens (also called ghost or virtual kitchens) to satisfy takeout orders.
The Saudi Arabian Pension Investment Fund invested $400M in CloudKitchens, according to The Wall Street Journal. The investment valued the company, which Kalanick set up in late 2018, at about $5B.
Information about the scale of CloudKitchens is sparse but according to the Journal, the company has made about 10 corporate acquisitions in the U.S., UK, China and India and bought about 100 properties globally. In the UK it bought dark kitchens startup FoodStars earlier this year, according to the FT.
CloudKitchens sets up kitchens for delivery-only restaurants and restaurants that need extra space to fulfill orders from online companies like DoorDash, Grubhub, PostMates, Deliveroo and Uber Eats, an arm of Uber that Kalanick established. CloudKitchens and Uber Eats have collaborated.
Deliveroo pioneered dark kitchens three or four years ago, setting up kitchens in prefabricated units, and Uber Eats trialed the idea of having restaurants share space to fulfill delivery orders.
CloudKitchens is a subsidiary of City Storage Systems, a real estate company established by Kalanick with $200M of equity, the majority of which has gone into CloudKitchens. He has since put another $100M into the company and the Saudi PIF investment takes it to $400M raised inside the space of a year, one of the largest investments in an early stage startup this cycle, according to the Journal.