Nearly seven months into the coronavirus pandemic, Uber has largely turned into a food delivery company. Former Uber employees, meanwhile, are finding another way to benefit from the dramatic change in the restaurant industry.
Virtual Kitchen, a start-up founded by two ex-Uber executives, has just raised $20 million of fresh capital, according to a filing on Tuesday with the SEC. The company provides technology to set up commercial kitchens designed for delivery, allowing restaurants to get food to customers without the expense and hassle of running a dining room or storefront — a model that’s especially attractive in the age of coronavirus lockdowns. One of its customers, Poki Time, said late last year that it was converting all three locations to virtual kitchens.
The company was founded in 2018 by CEO Ken Chong and Matt Sawchuk. Chong was previously a product manager for Uber’s marketplace business, and Sawchuk was a group manager at Uber Eats.
The partners are going up against their former boss. Travis Kalanick, who was the CEO of Uber until he was ousted in 2017, is the founder or Cloud Kitchens, which reportedly raised $400 million from Saudi Arabia’s Public Investment Fund last year. According to market research firm Reports and Data, the global market for cloud-based kitchens will grow from about $650 million in 2018 to $2.6 billion by 2026.
Restaurants that partner with Virtual Kitchen or Cloud Kitchens can still use delivery apps like Uber Eats, DoorDash and Grubhub. Uber has come to rely on its delivery business since the pandemic closed down much of the economy and led employers to convert to remote work. Uber said last month that gross bookings for Uber Eats jumped 113% in the latest quarter, while its core ride-hailing business plunged 73%.
The round was led by Keith Rabois, a partner at Peter Thiel’s Founders Fund, and comes just over a year after a $15.3 million round led by Andreessen Horowitz and Base10 Partners.
Virtual Kitchen didn’t immediately respond to a request for comment.