CloudKitchens, the delivery startup founded by former Uber CEO Travis Kalanick, has received a $400 million investment from Saudi Arabia’s Public Investment Fund (PIF), according to a report by The Wall Street Journal.
This is the first time a major investment by the fund has been announced since the murder of Washington Post journalist Jamal Khashoggi, which was blamed on the Saudis and sparked outrage around the world.
CloudKitchens is seen as a way to capitalize on the growing delivery market. The startup buys rundown buildings near city centers and converts them into “ghost” kitchens that restaurants can rent to make food specifically for delivery. CloudKitchens also operates its own delivery-only eateries with names like Excuse My French Toast.
The company is growing rapidly around the globe and PIF has been instrumental in that growth. It now has locations in China, India, the U.K. and the U.S.
Kalanick himself initially funded CloudKitchens with proceeds from the sales of his Uber shares, to the tune of $200 million. He also invested another $100 million in January. Including the Saudi money, the total amount raised is $700 million. Kalanick oversaw the creation of Uber Eats, which currently works with CloudKitchens.
PIF has also funded the company’s rivals, including Reef Technology, which helps restaurants put ghost kitchens in parking lots. Reef received $1 billion in debt and equity funding in the past two years.
The CloudKitchens investment by the Saudis is one of the largest ever for a new startup. Two other companies have been comparable: Quibi, a new media startup founded by former Walt Disney chairman Jeffrey Katzenberg, raised $1 billion in its first funding round in 2018. Outcome Health, which is a doctor’s office advertising company, raised $490 million.