Former Uber CEO Travis Kalanick’s Dark Kitchen Brand KitchenPlus Exits India

Former Uber CEO Travis Kalanick’s dark kitchen business CloudKitchens has reportedly shut its India operations due to its inability to generate sustainable revenue over the last three years.

CloudKitchens, which was branded as KitchenPlus in India, shut in the last week of December after laying off its entire workforce of 40 employees, people aware of the development told YourStory.

“The management informed us over a video call in December and terminated our employment contracts effective immediately,” a former KitchenPlus employee was quoted as saying by the publication.

CloudKitchens and KitchenPlus did not immediately respond to Inc42’s query on the matter.

Kalanick took over CloudKitchens in 2018 after being ousted from Uber following multiple scandals. US-based CloudKitchens either buys or leases warehousing space and converts them into dark kitchens, which restaurant businesses can rent in lieu of monthly fees to cook food to sell on various delivery apps like Swiggy and Zomato.

As per a September 2022 report by Financial Times, CloudKitchens had over 4,000 employees across Latin America, the US, the UK, and the Middle East.

CloudKitchens’ India brand KitchenPlus had presence in Delhi, Mumbai, Bengaluru, and Gurugram. KitchenPlus provided kitchen infrastructure to brands including Mamagoto, Smoor, Theobroma, and Burgerama, among others. It had about 80 cloud kitchens.

YourStory reported that over 30 out of 80 kitchens of KitchenPlus have been taken over by Delhi-based commercial shared-kitchen firm Speed Kitchen, which has about 120 kitchens across Mumbai, Bengaluru, Pune, Delhi, and Jaipur.

CloudKitchens is backed by Microsoft. The US-based tech giant invested in its $850 Mn funding round in November 2021 at a valuation of $15 Bn. Kalanick has reportedly been trying to expand CloudKitchens’ operations without drawing much attention.

As per the Financial Times report, the employees of the company are forbidden from mentioning the company they work for on LinkedIn and instead asked to put up “stealth start-up” as their place of work. Former employees have also spoken about toxic management practices at the company, which have invited various problems for the business.

Meanwhile, the Indian publication said that KitchenPlus used to provide premium experiences to restaurateurs with properties having gas connections, electronic tablets for order tracking, and more.

Two restaurant partners engaged with KitchenPlus told the publication that its rentals and the cost of utilities such as electricity and water supply were 50%-70% higher than the industry average.

Helped by a massive surge in online food deliveries, especially during the Covid-19 pandemic, the number of cloud kitchens saw a sharp rise in India over the last few years. As per a report, the domestic cloud kitchen market is projected to reach a size of $1.05 Bn by the end of 2023 and $2 Bn by 2024. It stood at $400 Mn in 2019.

However, the business involves high cash burn which has forced some of the companies running cloud kitchens to rethink their business. In November last year, Indian food delivery major Swiggy discontinued The Bowl Company, its cloud kitchen brand, in Delhi-NCR. On the other hand, ahead of its IPO, Swiggy is now reportedly looking to ship off its kitchen infrastructure business Swiggy Access.

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