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.