Uber founder Travis Kalanick has reportedly raised $400 million for his next act from Saudi Arabia. He'll be competing directly with his old company.
- Uber's ousted founder Travis Kalanick quietly raised $400 million from Saudi Arabia for his food-delivery startup in January, The Wall Street Journal reported Thursday.
- It's the first known investment by the kingdom since its murder of American journalist Jamal Khashoggi last year.
- Delivery-only restaurants are a hot topic right now, not only by startups but by Kalanick's former employer too.
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Travis Kalanick, the ousted founder of Uber,is quickly scaling up his next act.
According to The Wall Street Journal's Rory Jones and Rolfe Winkler, the billionaire quietly raised $400 million Saudi Arabia's sovereign-wealth fund in January, in a deal that values CloudKitchens, a delivery-only restaurant company at $5 billion.Saudi Arabia, notably, was one of Uber's biggest backers before Kalanick was booted from its C-suite amid a scandal-ridden year in 2017. It's also one of the kingdom's first major investments since the murder of American journalist Jamal Khashoggi last year, which has caused some investors - but not all - to reconsider their ties to the regime.
Kalanick and the company did not respond to requests for comment from Business Insider
According to its website, Cloud Kitchen supports other restaurants in their delivery efforts by providing a full kitchen optimized for takeout orders, as opposed to traditional front-of-house service. Partners advertised online include New York street-food favorite The Halal Guys, Fat Sal's Deli, and more. It also has its own delivery restaurants
"Everything about the restaurant experience is designed for walk-ins and reservations," the company says. "And while delivery is an increasing percentage of the business, many operators are forced to trade-off the dine-in experience with a booming delivery business."
But it's far from the only company looking to capitalize on the trend.Uber, at which Kalanick is still a director, is rapidly scaling up its Eats business, with plans to roll out more virtual restaurants soon. Softbank, now one of the worlds most prolific tech investors through its "vision fund" is also behind Reef Technologies - formerly known as Park Jockey - which aims to turn parking lots into kitchens, delivery hubs, and more.
"The amount of revenue that restaurants have access to is limited to the number of tables they have in their restaurant as well as how quickly they can provide meals to customers and how often those tables turn over," Ana Mahony, head of Uber Eats for US cities, told Business Insider earlier this year.
"Delivery enables [restaurants] to, within the same fixed-cost structure, not just make money off of in-store sales, but also have a second avenue to sell their meals."
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