As the virtual brand space goes through significant changes, delivery-focused, tech-forward pizza brand Milano Vice is bringing in funds by the millions.
The Berlin-based startup shared in a LinkedIn post Wednesday (Dec. 6) that it has secured 8.3 million euros ($8.94 million) in Series A funding in a round led by Coefficient Capital. With these funds, the company aims to be the largest pizza provider in Germany as well as to expand into new countries, according to Tech.eu.
The company operates primarily as a virtual brand, though it opened its first physical location in Berlin in October, and it uses artificial intelligence (AI) and computer vision for quality control — a model geared towards maximum labor efficiency.
“We always wanted to create something that would have a positive impact on food entrepreneurs, and the work we’ve been doing with Milano Vice is in service of this vision,” Milano Vice Co-founder and CEO Rudolf Donauer said, according to EU Startups. “We are building the restaurant of the future with a pizza brand that has a best-in-class delivery system, tastes great, and also helps small food businesses and restaurants grow their income.”
The company was founded on its creators’ considerable knowledge of the food delivery space, with Donauer as well as his co-founder Dennis Murselovic having previously held executive roles at major aggregator Delivery Hero. The former served as a global business development manager back in 2017, and the latter as head of operations at Australian delivery app Foodora around the same time.
Overall, the ghost kitchen space is changing significantly. Recently, virtual restaurant company Kitchen United shut down its in-Kroger omnichannel food halls as it shifted its focus to technology, rather than operating its own restaurants. In September, ghost kitchen startup CloudKitchens, led by Uber co-founder and ex-CEO Travis Kalanick, was reported to be cutting staff and closing warehouses to reduce expenses. In June, ghost kitchen platform Nextbite was acquired by hospitality mogul Sam Nazarian.
With the rapid proliferation of virtual brands in recent years, there have been quality control issues. Consequently, earlier this year, Uber Eats began cracking down, most recently removing 8,000 virtual restaurants from its marketplace. This marks a 20% reduction from the 40,000 virtual storefronts, by Uber’s count, in March.
Consumers, for their part, are often wary of virtual restaurants. The PYMNTS Intelligence study “Connected Dining: The Robot Will Take Your Order Now,” which drew from a census-balanced survey of nearly 2,000 U.S. consumers, reveals that only a minority — 48% — report being interested in virtual kitchens. Those who are interested in the technology, however, tend to favor the speed and convenience it offers.
Current economic conditions are certainly not helping the ghost kitchen space. PYMNTS Intelligence’s study “Connected Dining: Rising Costs Push Consumers Toward Pickup,” which drew from a survey of more than 2,100 U.S. consumers, revealed nearly half have been more likely to pick up their restaurant orders themselves rather than have them delivered due to inflation.
Still, overall, restaurants are becoming increasingly digital and technology-powered. According to data highlighted in the October edition of Digital-First Banking Tracker® Series Report, “The Restaurant of the Future Is Open. Will Diners Bite,” QSRs anticipate that 51% of tasks will be automated by 2025, while full-service restaurants expect to automate 27% of tasks.