The Cloud, a virtual kitchen start-up based in Abu Dhabi's Hub71, has secured $10 million in series A funding that it will use to expand operations in the GCC and Europe.
The investment round was led by Dubai-based Middle East Venture Partners (MEVP), Riyadh-based Olayan Financing Company, with participation from Saudi Arabia's Rua Growth Fund, The Cloud said on Wednesday.
The company, which recently opened its regional headquarters in Saudi Arabia, plans to expand to Kuwait next to boost its GCC footprint, with France and Italy as its next target markets in Europe, George Karam, co-founder and chief executive of The Cloud, told The National.
The company is currently present in the UAE, Belgium, Lithuania, the Netherlands, Romania, the US and the UK.
“We will utilise this funding to expand into Saudi Arabia, make an even bigger impact on restaurant owners and further bolster our talent and infrastructure,” Mr Karam said.
“Growing the brand regionally and globally” will result in “delivering strong returns for our investors”, he added.
Cloud or virtual kitchens — also known as ghost or dark kitchens — are commercial spaces built to prepare food specifically only for deliveries, with multiple brands able to operate from that centralised premises.
Food companies accept orders through mobile applications which are then delivered by the likes of Zomato, Deliveroo, Talabat and Careem.
The kitchens benefited greatly from the shift to online services during the coronavirus crisis, which forced people to rely more on apps and delivery services for food. The trend has continued and is expected to grow further as consumers enjoy its convenience, variety and discounts on offer.
The global cloud kitchen market is expected to hit $112.7 billion by 2030, from $29.4bn in 2020, expanding at an annual compound rate of about 13 per cent, according to data from Allied Market Research.
The Cloud's latest funding, which follows investment rounds in 2019 and 2020, the second of which was also led by MEVP, will also help the start-up expand and accelerate the development of its artificial intelligence-powered kitchen matching platform.
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It also shows the continued growth of Middle East start-ups, which are contributing to economies through their platforms, helping users conduct hassle-free activities and transactions.
The company's expansion is “yet another example of the region’s growing ability to foster talented entrepreneurs and enable them to build innovative technology solutions that are scalable and competitive at the global stage”, said Turki Aljoaib, managing partner of Rua Growth Fund.
Hub71, Abu Dhabi's global technology ecosystem, is now home to more than 170 start-ups, and those in the pre-seed, seed and series A stages have collectively raised more than $67m.
Last month, it welcomed a new batch of start-ups able to tap into additional resources to scale up their businesses.
The UAE capital is also accelerating its efforts to boost the cloud kitchen sector. Earlier this year, US-based technology start-up Reef, backed by Abu Dhabi's Mubadala Capital, partnered with Americana Group — the largest food and beverage operator in the Middle East — to open cloud kitchens in the region.
Dubai, meanwhile, is home to Kitopi, a cloud kitchen start-up that began four years ago and is now said to be valued at $1bn.
