Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
The funding round of Virtual Kitchen was led by Keith Rabois and it comes just over a year after a $15.3 million round led by Andreessen Horowitz and Base10 Partners.
Virtual Kitchen Co, the company founded by two former Uber Technologies Inc (NYSE: UBER) executives, has raised about $20 million in the new funding round as the company’s filing with the Security and Exchange Commission (SEC) shows.
The business model Virtual Kitchen represents is such whose relevance has grown with the coming of the coronavirus pandemic. This potential to bring an exceptional service offering from Virtual Kitchen coupled with market research firm Reports and Data, which projected the global market for cloud-based kitchens to grow from about $650 million in 2018 to $2.6 billion by 2026, must have enticed investors.
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 History and Funding
As mentioned earlier, Virtual Kitchen was founded in 2018 by CEO Ken Chong and Matt Sawchuk. While Chong was previously a product manager for Uber’s marketplace business, Sawchuk served as a group manager at Uber Eats.
Both established Virtual Kitchens in a bid to compete with Travis Kalanick, Uber’s ousted CEO who founded Cloud Kitchen. Virtual Kitchen aims to help restaurant startups make deliveries of food products and helps eliminate the need to own a storefront or any real estates associated with food service deliveries.
The business model is similar to Kalanick’s Cloud Kitchens, a business which has reportedly raised about $400 million from the Saudi Arabian Investment Funds in the past year.
Since its inception, Virtual Kitchen has been able to meet customer’s expectations as gleaned from its major clients, particularly Poki Time and Dosa. Poki Time’s owner Doug Wong said:
“VKC has revolutionized the way restaurants do business. Opening our last location took over a year from start to finish. With VKC, we were able to expand into multiple locations within a matter of weeks. We now cover more customers in popular neighborhoods we couldn’t reach before, with no costly investment on our end. We worked closely with the VKC team to redesign our delivery menu, optimizing for faster prep times, and unique packaging. The restaurant game is changing. Our partnership with VKC has allowed us to adapt and grow in ways we never imagined.”
Anjan Mitra, Co-founder of Dosa also noted that Virtual Kitchen’s service offering has helped the food startup to meet with its customer’s demand for casual dining and convenient deliveries. As gleaned from him, Virtual Kitchens has helped “evolve DOSA’s business model away from full-service restaurants.”
VKC Debuts in a Growing but Competitive Food Industry
With the increased demand for fast foods in recent years, food delivery companies have emerged ranging from Uber Eats to DoorDash.
With the prospects in the foodservice industry, key companies in the space are seeking investor’s funds stirring DoorDash to seek about $16 billion in pre-IPO funding back in June.
While online or virtual food deliveries come with enhanced logistics, the potential of any food-related business to succeed in the long-term will be hinged on who is most backed by liquid funds. A leverage Virtual Kitchen has sought with this recent funding round.