Every entrepreneur who has ever gone through an entire startup life cycle, irrespective of whether that cycle ended with a bang or a whimper, aspires for a second act that is larger than the first.
Travis Kalanick, Uber’s mercurial founder and former chief executive, is looking for a new act that ostensibly will be bigger than the iconic ride-hailing app. And if one is to believe recent news reports, he has already found it.
But what sort of market could be bigger than a solution for urban transportation mainstreaming the concept of a “gig economy”?
A market which covers “every person who eats”.
Say hello to CloudKitchens, a unit of City Storage Systems (CSS)—a real-estate company owned by Kalanick. The company, though, is in the on-demand food delivery market, but with a twist.
Of course, this is not Kalanick’s first rodeo in the food business. Uber has a large division called Uber Eats that focused on the delivery aspect, serving as a bridge between customers and restaurants. CloudKitchens, on the other hand, rents out fully-functional kitchen spaces with licenses and equipment to restaurants. Also known as dark kitchens, cloud kitchens are restaurants that have no dine-in option—they serve customers through online orders or takeaways. By doing away with the dine-in option, cloud kitchens obviate the need for the two major cost components that restaurants have to deal with—salaries for service staff and rent. (We’ve written about this phenomenon before.)
In the past 18 months, CSS has invested in real estate in countries like Singapore, London and South Korea. Last month, Kalanick stepped into India with an investment in cloud kitchen company Rebel Foods Pvt Ltd. While Rebel Foods has not disclosed the exact amount Kalanick put in, he was part of its $125 million Series D round that included New York-based tech-focused hedge fund Coatue Management. After this last round, Rebel Foods was valued at $525 million.
Rebel Foods, nee Faasos, started in 2004. After a long, not-so-noticeable existence, it raised $8 million in a Series A funding round led by US venture capital firm Sequoia Capital in 2011 and started scaling. Switching to a cloud kitchen-model was a no-brainer once Rebel realised 80% of its business was coming from in-house deliveries. Eight years later, it is at the top of the food chain, India’s biggest cloud kitchen by revenue, orders, number of kitchens and geographical presence.
It’s taken Rebel four pivots to get here, with a fifth potentially in the offing.
As we wrote in early 2017, Rebel went from being a Quick Service Restaurant (QSR) to a dark kitchen to a marketplace, and finally, a multi-brand cloud kitchen.