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Ex-Uber CEO Travis Kalanick is back with a secretive startup already valued at $5 billion.
His new company, called CloudKitchens, builds commissary
kitchens that restaurants can use for their delivery operations. CloudKitchens
also operates its own delivery-only restaurants within those commissaries,
including brands like Excuse My French Toast, Egg the F* Out, and B*tch Don’t
Grill My Cheese.
Kalanick has kept CloudKitchens largely under wraps, but
he’s been buying up cheap properties across the U.S, India, China, the U.K. and
elsewhere. He also capitalized the company with $200 million of his own money, according
to The Wall Street Journal, and added another $100 million in
January. Saudi Arabia’s Public Investment Fund (PIF) poured another $400
million into his venture, bringing the total to $700 million in funding. (My
colleague Maria Aspan points
out that the deal reportedly makes Kalanick the first Silicon Valley
founder to accept an investment directly from the Saudi government since the
murder of journalist Jamal Khashoggi a year ago.)
But the question more people should ask is: What the hell
is Kalanick’s goal in building CloudKitchens? And here’s where I think he’s
playing some sort of 3D chess.
Let’s look at the facts: At Uber, Kalanick oversaw the rise
of Uber Eats, the company’s food delivery unit. Eats launched about six years
after Uber’s inception in 2015. The service debuted in Los Angeles, New York,
and Chicago. Fast forward a few years and today, Eats boasts $1.5
billion in revenue and serves food from more than 220,000 restaurants in
more than 500 cities around the globe. It’s the bright spot in Uber’s business.
Kalanick is betting that these non-traditional kitchens will
revolutionize the food delivery business. There are a couple of types. “Virtual
restaurants” refers to real-life restaurants that make different cuisines
specifically for food delivery apps. Since 2017, Uber has helped start 4,000
virtual restaurants exclusive to its Uber Eats app. The other — the one
Kalanick is focusing on — is “ghost kitchens,” a name for those
that have no retail presence and serve as a meal preparation hub for delivery
orders. (This
feature explains it well.)
I had heard a rumor about Kalanick’s end game: build up
CloudKitchens and make it such a compelling business that Uber would have no
choice but to buy it. And then, boom, the ousted founder would be
back inside the company he started. I reached out yesterday to a source familiar
with CloudKitchens to ask about the validity of this rumor.
They told me Kalanick does want to compete with Uber
— but he does not want to sell. He wants to compete with Uber and win.
And that, my friends, would be checkmate.
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VENTURE DEALS
– Side, a San Francisco-based real estate brokerage, raised more than $60 million in funding. Investors include Sapphire Ventures, Trinity Ventures, and Matrix Partners.
– Diamanti, a San Jose, Calif.-based developer of a bare-metal hyperconverged platform for Kubernetes and containers, raised $35 million Series C funding. Investors include CRV, Goldman Sachs, GSR Ventures, Northgate Capital and Threshold Ventures (formerly DFJ Venture).
– Snapdocs Inc, a San Francisco-based real estate technology platform, raised $25 million in Series B funding. F-Prime Capital led the round, and was joined by investors including Sequoia Capital, Freestyle Capital and Founders Fund.
– Nightfall AI (fka Watchtower AI), a San Francisco and Palo Alto, Calif.-based cloud-native data loss prevention platform, raised $20.3 million in funding. Bain Capital Ventures and Venrock led the round, and were joined by investors including Pear VC, Sri Viswanath, and Kelvin Beachum.
– Productiv, a Palo Alto, Calif.-based application engagement analytics company, raised $20 million in Series B funding. Norwest Venture Partners led the round, and was joined by investors including Okta Ventures and Accel.
– Extend, a San Francisco-based API-first company that allows merchants to offer extended warranties as a service, raised $16.4 million in funding. GreatPoint Ventures led the round, and was joined by investors including LightBank and Pritzker Group VC.
– HealthCare.com, a Miami, Fla.-based provider of technology-enabled health insurance solutions, raised $18 million in Series B funding. Second Alpha Partners led the round, and was joined by investors including AXIS Capital and CNO Financial Group.
– Digits, a San Francisco-based fintech startup, raised $10.5 million in Series A funding. Investors include Benchmark.
– Mooala, a Dallas-based maker of organic, dairy-free beverages and creamers, raised $8.3 million in Series A funding. Sweat Equities led the round, and was joined by investors including M3 Ventures.
– Sepio Systems, a U.S.and Israel-based cybersecurity company, raised $6.5 million in Series A funding. Hanaco Ventures and Merlin Ventures led the round, and was joined by investors including Energias de Portugal, Mindset Ventures and Pico Partners.
– Ash & Erie, a Detroit-based direct-to-consumer clothing startup making clothes for shorter men, raised $1.2 million in seed funding. Irish Angels led the round.
HEALTH & LIFE SCIENCES DEALS
– eGenesis, a Cambridge, Mass.-based biotechnology company utilizing gene editing technologies for the development of human-compatible organs, raised $100 million in Series B funding. Fresenius Medical Care Ventures led the round, and was joined by investors including Leaps by Bayer, Wellington Partners, ARCH Venture Partners, Biomatics Capital, Alta Partners, and Khosla Ventures.
– Imbed Biosciences Inc, a Madison, Wisc.-based biotech company focused on developing advanced therapies for burns, chronic ulcers and surgical wounds, raised $4 million in funding. Formidable Asset Management led the round, and was joined by investors including WISC Partners.
PRIVATE EQUITY DEALS
– Time Manufacturing Company, a portfolio company of The Sterling Group, acquired BrandFX, a Fort Worth, Texas-based maker of advanced composite service bodies, line bodies, inserts, toppers and covers. Financial terms weren’t disclosed.
OTHER DEALS
– DoubleVerify acquired Ad-Juster, a San Diego, Calif.-based SaaS-based reporting and analytics platform for digital publishers. Financial terms weren’t disclosed.
IPOs
– Cue Holdings, a Chinese digital advertising agency, is seeking an IPO next year to raise up to $300 million to $400 million, Reuters reports. KKR backs the firm. Read more.
FIRMS + FUNDS
– TCG, a Los Angeles and San Francisco-based consumer-focused investment firm, raised more than $700 million for its debut fund.
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