Venture Capital: Kalanick, of Uber Fame, Buys $130M of Real Estate For CloudKitchens Startup

October 21, 2020 | News, Venture Capital
https://dailyalts.com/wp-content/uploads/2020/10/cooking_kitchen_process_restaurant-1610092-pxhere.jpg

With $2.7 billion from the sale of his stake in Uber, Kalanick has enough financial firepower to own his ghost kitchens.

You could call it providential timing, but Kalanick’s CloudKitchens startup received a huge boost from the Covid-19 pandemic. With restaurants out of business, or temporarily shuttered, shelter in place diners had no choice but to order food for home delivery. Ghost kitchens, which let out space for cooking to food-for-delivery businesses, particularly in cities such as Los Angeles, San Francisco, and New York, suddenly witnessed a surge in business. (Wall Street Journal)

Kalanick in an own-not-rent mode

Travis Kalanick, the founder and former chief executive of Uber (NYSE: UBER), has been a low profile acquirer over the past two years of properties suitable for use as ghost kitchens for his new startup. These include warehouses, closed restaurants, even auto-body shops.

The Wall Street Journal gleaned from a painstaking review of property and corporate records that various entities linked to Kalanick’s CloudKitchens startup have spent over $ 130 million on the acquisition of more than 40 properties in about two dozen cities across the U.S.

Kalanick’s business model appears to be somewhat different from his rivals in the trade. Where start-ups such as Virtual Kitchen Co., Reef Technology, and Kitchen United usually rent properties for their cloud kitchens or enter revenue-sharing deals, Kalanick goes for the riskier owned-property option.

Understandably, his extensive property bets could pay off handsomely in the event of a turnaround in real estate values. However, he may not be too worried on that count given his own deep pockets as well as the recent $ 400 million investment in CloudKitchens by the Saudi Arabian sovereign wealth fund.

Further, he has access to millions of dollars worth of loans from Goldman Sachs (NYSE: GS) for funding his property acquisitions.

Ultra low profile

However, what is striking is the length to which Kalanick and City Storage Systems, CloudKitchens’ parent company, go to keep their property acquisition streak away from the public eye.

It may be that Kalanick likes his privacy, or wants to keep the competition in the dark about his expansion plans.

Notably, CloudKitchens does not reveal the locations of its kitchens on its website or Google Maps. It also tells its employees not to name the start-up in their LinkedIn profiles.

Often, even commercial real estate brokers working on the firm’s property deals do not know its identity.

Related Story:   Dexai Robotics Raises $5.5M To Develop Alfred, an Aspiring Robotic Chef                                                  

                                                   

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2022/05/Michael-Saylor_HQ-2-scaled.jpg
Digital Assets: Michael Saylor Unmoved By Crypto Weakness; “We Think It’s The Future Of Money”
May 20, 2022     Digital Assets, News

Michael Saylor, CEO of MicroStrategy (NASDAQ: MSTR), who is permanently bullish on bitcoin, reiterated his positive outlook for the leading crypto in an interview on Thursday. Note that MicroStrategy currently…

https://dailyalts.com/wp-content/uploads/2022/05/bacteria-g0d4c93622_640-overlay.png
Digital Assets: Traditional Markets Could Suffer Contagion From (Un)Stablecoins (SEC Chair Gensler)
May 20, 2022     Digital Assets, News

The crypto world was dealt a body blow by the collapse of the TerraUSD (UST) stablecoin earlier this month. The Terra meltdown is now being referred as crypto’s “Lehman moment.”…

https://dailyalts.com/wp-content/uploads/2022/05/xendit-unit-combined.jpg
Venture Capital: Big-Ticket Funding Rounds In Fintechs
May 20, 2022     FinTech, News, Venture Capital

Fast-growing, Southeast Asia-focused payments infrastructure platform Xendit closed on a US$300 million Series D funding co-led by Coatue and Insight Partners with additional investment from Accel, Tiger Global, Kleiner Perkins,…

https://dailyalts.com/wp-content/uploads/2022/05/Hero_image_with_QR_code.jpg
FinTech: Sam Bankman-Fried Led FTX.US Makes Inroads Into Stock Trading
May 20, 2022     Digital Assets, FinTech, Latest News, News

FTX Stocks is an equity trading platform offered through the FTX US trading application. FTX US announced Thursday a private beta phase trading on the platform for US customers selected…