EDGE
Book a demo

Cloud Kitchens

Defining the future of the restaurant business.

Overview

Essentially, cloud kitchens are the restaurant industry’s equivalent of co-working spaces, in the form of a shared kitchen space. Cloud kitchens are usually located in industrial districts, vacant warehouses, or unused parking or storage facilities to offer restaurateurs an alternative to expensive restaurant prime real estate. Clients can instead rent multiple fully equipped cloud kitchens for flexible amounts of time. Cloud kitchens allow chefs to test their products, or more established restaurants can expand their reach without incurring the expenditure of opening full-service restaurants.

The most notable advancements enabling cloud kitchens has been the advent of online food ordering platforms and the growing popularity of shared working spaces.

What's driving this industry?
Market Sizing

The US Cloud Kitchen Addressable Market Value to Range Between USD 49.4-115.3 Billion

View details

COVID-19 IMPACT

The restaurant industry was hit hard by the Covid-19 pandemic, with a majority of dine-in restaurants forced to shut down as authorities aim to contain the outbreak. As of December 2020, 17% of all US restaurants had permanently closed or announced plans to do so.

This has, however, created potential market opportunities for the industry, as cloud kitchens have the potential to help restaurants cater to the growing demand for delivery-only services. Cloud Kitchen operators have seen a spike in funding and new partnerships to expand operations and grow the sector.

  • In December 2020, Crave Hospitality raised USD 7.3 million to build teams for its next four cloud kitchens .

  • In November 2020, Reef Kitchen raised USD 700 million to expand the number of the parking lots it uses for its cloud kitchens up to 10,000 up from 4,800 .

  • In October 2020, Ordermark raised USD 120 million to assist restaurants transition into online ordering and expand its cloud restaurant portfolio .

  • CloudKitchen Co was reported to have spent USD 130 million over 2019-20 on real estate to expand operations.

Market Mapping

A variety of cloud kitchen models are currently under development with the most popular being commissary kitchens, commercial-grade kitchens where foodservice providers can safely and legally prepare, cook, and store food and equipment—without having to own and maintain the facility themselves. Industry incumbents dominate the aggregator managed mode, while single-brand kitchens are less common in part due to their limited potential to reach scale.

Incumbents
Growth
Early
Seed
Pre-Seed
Commissary Kitchens
?
Franchise Model
?
Single Brand Kitchens
?
Aggregator Managed Kitchens
?
CloudKitchens
CloudKitchens
CloudKitchens
CloudKitchens
Kroger
REEF Technology
Ordermark
Sweetheart Kitchen
Virtual Dining Concepts
CloudKitchens
Kitopi
Karma Kitchen
All Day Kitchens
Creating Culinary Communities (C3)
Taster
Kitchen United
Keatz
Zuul
Epic Kitchens
Kitchen Republic
The Local Culinary
Amped Kitchens
Garrett’s Family Steakhouse
Fulton Kitchens
Crave Hospitality Group
Mealco
Nimbus Kitchens
Ghost Kitchen
Franchise Creator Inc
JustKitchen
Wired Kitchens
Creating Culinary Communities (C3)
The Local Culinary
Kitchen Ventures
Ghost Kitchen Brands
Franchise Creator Inc
JustKitchen
Kroger
Butler Hospitality
Kitchen Ventures
DoorDash Kitchens
Deliveroo
Grab

The Disruptors

Anticipated cloud kitchen boom attracts rush of venture capital firms

Cloud kitchens have been a growing trend in the US with a few start-ups in this space obtaining substantial funding to expand business. In 2019 alone, well over USD 800 million was invested in cloud kitchen startups.

Some of these startups have been backed by former CEOs of major tech startups. Uber co-founder Travis Kalanick invested heavily in US-based CloudKitchens as well as in London-based Karma Kitchen. A former senior executive of Uber also opened up a cloud kitchen business called All Day Kitchens (formerly Virtual Kitchen Co).

CloudKitchens is the emerging leader in this space, and it has received the highest funding in the industry, having raised a total of USD 400 million in the past two years. Its investors include the Saudi Arabian Public Investment Fund. Its association with Kalanick has allowed the company to raise capital quickly and will likely also contribute positively to its expansion and business development as it scales up.

Another company making progress in the space is Google-backed Kitchen United. The company recently announced a USD 40 million funding round (total funding of USD 50 million), where the funding will be used for an aggressive expansion strategy over the next few years.

Commissary Kitchens

?

Disruptors

?
Funding in USD Millions
REEF Technology
1502
CloudKitchens
1250
Kitopi
504
Karma Kitchen
316
Ordermark
151
All Day Kitchens
120
Creating Culinary Communities (C3)
90
Taster
51
Kitchen United
50
Sweetheart Kitchen
41
Keatz
22
Zuul
9
Epic Kitchens
6
Nimbus Kitchens
Unknown
JustKitchen
Unknown
The Local Culinary
Unknown
Garrett’s Family Steakhouse
Unknown
Virtual Dining Concepts
Unknown
Watchlist
?
Crave Hospitality Group
Mealco
Ghost Kitchen
Kitchen Republic
Franchise Creator Inc
Amped Kitchens
Fulton Kitchens
Wired Kitchens

Franchise Model

?

Disruptors

?
Funding in USD Millions
Creating Culinary Communities (C3)
90
JustKitchen
Unknown
The Local Culinary
Unknown
Ghost Kitchen Brands
Unknown
Watchlist
?
Kitchen Ventures
Franchise Creator Inc

Single Brand Kitchens

?

Disruptors

?
Funding in USD Millions
Butler Hospitality
50
Watchlist
?
Kitchen Ventures

REEF Technology

Founded in 2013, REEF Technology (formerly known as ParkJockey Global, a parking lot management company) is mainly involved in providing hardware, software, and management services for parking lots. However, since its inception, the company has expanded to operate businesses such as cloud kitchens, healthcare clinics, logistics, and last mile delivery hubs in empty parking spaces. The company sets up spaces for these businesses using various containers for stores to set up operations, taking advantage of the growing on-demand economy trend where it will house a collection of businesses and services specific to the needs of neighborhoods.

Against this backdrop of growth in on-demand food delivery, in 2019, it launched REEF Kitchens, in which parking lots are used for shared kitchen operations. As of November 2020, the company operated in more than 20 markets in North America, with over 100 kitchens consisting of roughly 30 tenants. REEF kitchens are housed in proprietary containers, with each one able to accommodate between one and five restaurant brands or clients. The company refers to its in-garage ghost kitchens as “vessels” and modifies them according to customer requirements. Despite the COVID-19 pandemic, the company stated that it was performing well owing to its REEF Kitchen business thriving through an increase in on-demand delivery orders. The food offered by REEF’s internal brands comes from US Foods, a food distributor that works with colleges, hotels, and hospitals, apart from being a wholesale supplier to independent restaurants and diners. The company has also partnered with external brands such as Burger Bytes, Della Bowls, and I Heart Mac & Cheese. For delivery, the company partners with brands such as Uber, DoorDash, GetAround, and Nuro.

The company was pursuing an acquisition-driven strategy to further expand its presence and market reach. In November 2021, REEF announced the acquisition of iKcon Restaurant LLC, a Dubai-based cloud kitchen operator, marking its first major transaction in the MENA market. This acquisition is part of REEF’s strategy to expand beyond North America. In December 2021, REEF acquired 2ndKitchen, a US-based virtual kitchen for hotels, offices, buildings, and other hospitality companies. 2ndKitchen’s existing business was to be combined with REEF's brand and operate under its hospitality division. This was part of REEF’s strategy to expand its customer base into the hospitality division.

In November 2020, the company received equity funding of USD 700 million, mainly backed by existing investor Softbank and new investor Mubadala Corp. The consortium was further supported through the participation of Oaktree, UBS Asset Management, and venture capital firm Target Global. The funds are expected to be used to scale up operations from 4,800 to 10,000 new locations across the country. Furthermore, REEF launched a USD 300 million fund in partnership with Oaktree. REEF and Oaktree’s infrastructure arm has formed the Neighborhood Property Group to acquire strategic real estate assets.

Segment:
Commissary Kitchens
Total funding:
USD 1.5 billion
Competitors:
The Local Culinary
Disruptor Funding History

Commissary Kitchens:

REEF Technology
CloudKitchens
Kitopi
Karma Kitchen
Ordermark
All Day Kitchens
Creating Culinary Communities (C3)
Taster
Kitchen United
Sweetheart Kitchen
Keatz
Zuul
Epic Kitchens
Crave Hospitality Group
Mealco

Franchise Model:

Creating Culinary Communities (C3)
Kitchen Ventures

Single Brand Kitchens:

The Incumbents

Online food aggregators remain popular entrants to the cloud kitchen space

Different types of players in the restaurant delivery supply chain are now exploring the cloud kitchen space. These include third-party delivery platforms and supermarket chains, who have entered the market via partnerships or backward integration strategy; third-party aggregators such as DoorDash and Deliveroo, who have now started to backward-integrate into the restaurant delivery value chain and are providing cloud kitchen services for existing restaurants on their platform, as well as services for original brands; and retail stores such as Walmart and Kroger, who have expanded into this space using their store network to set up cloud kitchen facilities in collaboration with cloud kitchen operators across North America. 

Commissary Kitchens
Franchise Model
Single Brand Kitchens
Aggregator Managed Kitchens
In House Development
M&A
Partnership
Investment

Notable Investors

No investor data is available

Funding data are powered by Crunchbase
arrow
menuarrow
Unlock company details, featured industry reports, and news updates.
Book a demo

By using this site, you agree to allow SPEEDA Edge and our partners to use cookies for analytics and personalization. Visit our privacy policy for more information about our data collection practices.