Uber’s Infamous Co-founder Wins Microsoft As First US Investor For His Dark Kitchen Startup

  • Microsoft Corp (NASDAQ: MSFT) has become the first U.S.-based investor in Uber Technologies, Inc (NYSE: UBER), known to have backed CloudKitchens, the “dark kitchen” startup run by the ride-hailing company’s controversial co-founder Travis Kalanick, the Financial Times reports.
  • The investment was part of CloudKitchens’ $850 million funding round that closed in November 2021, valuing it at $15 billion.
  • The cash gain helped CloudKitchens to drive its user growth globally, with over 4,000 employees across the U.S., Latin America, the U.K., and the Middle East.
  • CloudKitchens buys or leases warehousing space, converting the premises into “dark kitchens” that restaurant businesses can rent to cook food for sale via delivery apps like DoorDash, Inc (NYSE: DASH) or Uber Eats.
  • Microsoft had invested $100 million in Uber in 2015 when the ride-hailing service was worth $50 billion.
  • A series of ethical scandals and management failings led to Kalanick’s exit from Uber in 2017.
  • Former employees have acknowledged CloudKitchens’ toxic culture leading to a high attrition rate.
  • Kalanick bought out existing investors in City Storage Systems, rebranding it as CloudKitchens.
  • By the end of 2019, he had sold off his entire stake in Uber, helping him to largely self-finance his new kitchen startup in its early years.
  • The global cloud kitchen market accumulated $57 billion in 2021 and will likely grow at a CAGR of ~13% during 2022-2030, driven by online food delivery services and erratic work schedules.

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