Dubai cloud kitchen company Kitopi raises $60m to fuel global expansion

The start-up will add 100 more locations globally to its current 30 in the Gulf, US and UK

Kitopi, which stands for 'Kitchen Operation Innovations', cooks and delivers to customers on behalf of restaurants. The start-up succeeded in raising $60m in the first six months of the year. Courtesy KitopiShow less

Dubai-based Kitopi — which operates “cloud kitchens” for restaurant delivery — raised $60 million (Dh220.4m) in a Series B round and will add 100 more locations globally by the end of this year, the company said.

"We'll be using this money to: one, build kitchens globally — so increase our geographical footprint — particularly in the US. And, second, we're investing in software technology to help build much more efficient operations," Mohamad Ballout, chief executive and co-founder of Kitopi, told The National.

Kitopi currently operates 30 cloud kitchens — outlets that prepare food for online delivery orders but offer no dine-in facility — in the UAE, Saudi Arabia, Kuwait, the UK and the US. Half of the 100 locations it plans to add in 2020 will be in the US, where Kitopi has a dual headquarter New York office.

The latest funding round was led by US firms Knollwood Investment Advisory and Lumia Capital and joined by existing investors, including China's MSA Capital; the UAE’s Beco Capital, Global Ventures and CE-Ventures; and Kuwait's Gulf Investment Corporation (GIC), among others.

“Kitopi has demonstrated its ability to differentiate itself from others in an increasingly crowded space, by collaborating closely with restaurants to achieve one common objective,” said Chris Rogers, partner at Lumia Capital, in a statement on Monday. “We’re excited to see how Kitopi continues to reinvent the food tech space.”

Since it was founded in January 2018, Kitopi has raised approximately $2m in a pre-seed round and $27.2m in series A funding, bringing the total to $89m.

The company, founded by Mr Ballout, Saman Darkan, Bader Ataya and Andres Arenas, now has more than 1,200 employees and has partnered with more than 100 restaurants, such as Operation Falafel, Pizza Express and Right Bite.

Kitopi, which stands for “Kitchen Utopia”, is a smart kitchen network that cooks and delivers to customers on behalf of restaurants. It helps restaurants scale quickly in the digital age, rather than in "the traditional brick-and-mortar way", said Mr Ballout.

The "cloud kitchen" or "ghost kitchen" concept has been gaining traction recently. Uber founder Travis Kalanick's new company CloudKitchens secured $400m from Saudi Arabia's sovereign wealth fund last year, according to a November report from The Wall Street Journal.

Mr Ballout said Kitopi differs in that CloudKitchens leases shared kitchen spaces for delivery-only restaurants.

“They’re focused on the infrastructure component. We’re focused on being an operating platform, so we are the ones actually operating on behalf of restaurants,” Mr Ballout said. “Both models work and both work very closely together, so we don’t see it as competition.”