Bay Area-based Virtual Kitchen raises $20M

Dive Brief:

Virtual Kitchen, a company founded by former Uber executives Ken Chong and Matt Sawchuk, has raised roughly $20 million in capital, according to an SEC filing.
The latest funding round was led by Founders Fund, according to CNBC. A year ago, Virtual Kitchen raised $15 million in funding led by Andreessen Horowitz and Base10 Partners. The latest round brings its total funding to date at over $37 million.
The company's previous funding round was put toward building new facilities, R&D and hiring, all of which could be accelerated due to rising demand for delivery following the impact of the coronavirus pandemic. Virtual Kitchen is also competing with virtual kitchen platform CloudKitchens, which was founded by ex-Uber CEO Travis Kalanick.

Dive Insight:

While the ghost and virtual kitchen space was growing before the pandemic hit, the market has accelerated as brands create their own virtual concepts, such as Brinker International's It’s Just Wings. Others have partnered with ghost kitchen providers, such as Fat Brands teaming with Epic Kitchens in April.

Virtual Kitchen, which had six kitchens in the San Francisco Bay Area as of February, will likely use its latest capital infusion toward its growth into new markets. CEO Ken Chong previously told Food on Demand that his company's goal is to expand nationally and potentially internationally.

But it is certainly not the only company in the space on a fast growth trajectory. Reef Kitchens, which launched in June 2019, uses parking sites and garages to install pods that house kitchens. It has 4,500 sites around the country where it is in the process of installing pods, according to The New York Times. A new concept in Denver, called ChefReady, is expected to open Oct. 1 to provide 10 kitchens under one roof, according to an email sent to Restaurant Dive. Third-party delivery provider DoorDash also has been opening its own kitchens, with its first kitchen in the Bay Area opening last year.

Investors have also been backing these concepts within the last 18 months. Kitpoi raised $60 million earlier this year to be used to open 50 delivery-focused kitchens in the U.S. and 100 internationally by the end of this year. In 2019, CloudKitchens raised $400 million while Kitchen United raised $40 million and has plans to eventually open 400 kitchens nationwide.

With the industry expected to be worth $1 trillion globally by 2030, concepts like Virtual Kitchen should have plenty of room to grow and lots of investors willing to back these high-growth concepts.