'Ghost kitchen' startup Kitopi raises $60M to expand in US
Restaurant owners are turning to delivery-only models to cut overhead costs on rent and employment
Ghost kitchens are heating up the delivery market.
Food tech startup Kitopi, which provides kitchen space and delivery services to restaurants, raised $60 million in funding to expand in the U.S., it announced Monday. It’s the latest “cloud kitchen” that’s piqued investors’ appetites.
Kitopi raised $60 million in funding to expand ghost kitchen operations in the U.S.
Kitopi, based in Dubai and New York, has 30 satellite kitchens across the U.S., United Arab Emirates, Saudi Arabia, the United Kingdom and Kuwait, and it plans to open 50 locations in the U.S. and another 100 globally by the end of the year with the new series B funding led by Lumia Capital, an investor in online and mobile food ordering service EatStreet.
FOOD DELIVERY FROM GHOST KITCHENS BRINGS RESTAURANT-QUALITY FOOD TO THE MASSES
Sixty-percent of eaters used a third-party delivery service like DoorDash or Grubhub to get food on-demand, according to a survey from the National Restaurant Association and market research firm Technomic Inc.
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And more restaurant owners use delivery-only models to cut overhead costs on rent and employment while growing their business as more consumers rely on food ordering apps to get meals fast. A number of tech execs are capturing the market. Uber co-founder Travis Kalanick started CloudKitchens in 2018, a startup that rents commercial space it turns into commissary kitchens for restaurants to enable them to take on more delivery. And third-party delivery service DoorDash started DoorDash Kitchens last year, which provides kitchen space for restaurants to use for delivery-only orders.
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The delivery-only model could be cost-effective for business owners looking to trim overhead costs, industry insiders say.
“Declining in-store food traffic, rising labor costs, a tight labor market and increased customer appetite for delivery have led restaurants to turn to delivery to generate growth,” Greg Golkin, a managing partner of Kitchen Fund, a private equity firm, wrote in an essay for QSR Magazine last month.
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