A group of former Uber employees has started a cloud kitchen business to rival that of former Uber CEO Travis Kalanick, who made the news recently with his own similar business CloudKitchens, according to reports.
The startup, which is located in Oakland, California, aims to facilitate food deliveries for nearby restaurants that receive high volumes of orders from delivery companies like Uber Eats.
The company, called Virtual Kitchen Co., recently announced a $15 million investment from notable names like Andreessen Horowitz, Base10 Partners and others.
Uber also recently dabbled in the cloud kitchen space, but had to stop doing so because the venture was too capital-intensive, and the company is struggling with its own issues due to lower stock prices and lack of profitability. However, the company said it is not worried about a new rival.
“Anything that supercharges the selection for customers is great for all of us,” said Janelle Sallenave, head of Uber Eats in the U.S. and Canada.
Virtual Kitchen plans to compete with the much larger offering from Kalanick by focusing more on local offerings. The company has started working with local restaurants like Indian chain Dosa, whose owner said the pairing makes “financial sense.”
The venture was started in 2018 by Ken Chong, who led Uber marketplace product teams, and Matt Sawchuk, who oversaw Uber Eats. Professional chef Andro Radonich was also a founder.
The two men said they got the idea for the company after watching how delivery could strain a restaurant’s business with high demand.
In terms of competition, the new startup will have trouble competing with Kalanick mainly due to his resources. Kalanick is worth $3.4 billion and was recently backed by the Saudi Arabia wealth fund, which invested $400 million. Regardless, the company said it will continue to do what it does best, and try to expand regularly.
“We want to get this right and learn as quickly as possible,” Chong said. “Our ambitions are national, if not global.”