Cloud Kitchen Platform Kitopi Seeks $200 Million To Push Into Southeast Asia

Kitopi, a shared kitchen platform focused solely on online food delivery, is seeking $150 million to $200 million in financing to reach markets in Southeast Asia.

Reuters, citing unnamed sources, reported Thursday (March 18) that these funds could give Kitopi — an unlisted company — a valuation of around $1 billion. The company has hired Bank of America to arrange the funding round. Both the bank and Kitopi declined to comment.

Kitopi suspended its U.S. and U.K. operations last year due to the COVID-19 pandemic, shifting its attention to Asia and the Middle East, regions where growth was feasible. Headquartered in Dubai, Kitopi runs more than 60 kitchens and employs more than 1,500 people.

“So-called ‘cloud kitchens,’ facilities built to produce food specifically for delivery, are becoming popular with investors,” Reuters wrote. “Kitopi has raised $117.2 million since its inception from investors including Dubai-based venture capital firm BECO Capital and US-based Lumia Capital.”

Red Lobster opened its first ghost kitchen in late 2020 in Chicago in an effort to attract diners who wanted to enjoy the chain’s seafood without worrying about dining in.

“Off-premise is a huge priority for Red Lobster,” CEO Kim Lopdrup said at the time. “We tripled our off-premise sales in the two years before COVID-19 began, and we’ve tripled them again over the last eight months. Opening a ghost kitchen is a natural next step in expanding our off-premise business.”

And many industry executives expect the trend to continue even after the pandemic abates.

“We think digital is very, very sticky,” Noodles & Co. CEO Dave Boennighausen said in an interview with PYMNTS earlier this month. “The top 50 percent of restaurants that are above our average for dine-in are doing about 5 percent better than those that are in the bottom half … The story is that digital is sticky, that even as people started to go into the restaurants, we didn’t lose any of the digital sales.”

He argued consumers prefer the digital experience, particularly for chains like his, which tend to skew younger. The digital transactions at a ghost kitchen are quicker and easier. “A computer is never going to get your order wrong.”