Uber founder Travis Kalanick. Picture: GETTY IMAGES
Uber founder Travis Kalanick. Picture: GETTY IMAGES

London  — Travis Kalanick’s secretive new food start-up took $400m (R5.9bn) of funding from Saudi Arabia’s public investment fund (PIC), the Wall Street Journal has reported, citing people familiar with the matter it didn’t identify.

The financing valued the former Uber Technologies CEO’s CloudKitchens at about $5bn, according to the report, which said the deal was completed in January.

A spokesperson from PIF declined to comment.

Kalanick, who was ousted from the US ride-hailing leader he co-founded in 2017  after a series of scandals, is betting on so-called dark kitchens becoming a backbone for the rapidly expanding food-delivery market.

Cloud kitchens, much like cloud computing services, have become a popular business model for food-delivery providers that want to serve up meals while skirting the expense of traditional restaurants with their associated high real estate and service staff costs. Food is prepared through a network of tightly packed kitchen spaces in affordable locations, far from the bustling high streets that restaurant brands favour.

The UK’s Deliveroo helped pioneer the idea, but CloudKitchens — a subsidiary of Kalanick’s Los Angeles-based City Storage Systems — acquired London-based dark kitchen start-up FoodStars last year, according to a Financial Times report in March.

In September, Kalanick invested in India’s largest shared-kitchen company, a person familiar with the matter said, taking his second act in business to one of the world’s fastest-growing internet arenas.

Kalanick’s real estate company, City Storage Systems, bought a small stake in Rebel Foods as part of a previously disclosed $125m  round of funding, the person said, asking not to be identified talking about a private deal.

Kalanick has taken a slice of a business valued at $525m that delivers butter chicken and paneer-topped pizzas to millions of Indians, backed by big-name investors from Coatue Management and Goldman Sachs to Sequoia Capital and ride-hailing giant Gojek. Rebel Foods is now expanding beyond its home turf and into Southeast Asia and the Middle East.

With Saritha Rai 

Bloomberg