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Thursday, December 26, 2019

Uber, Kalanick: A Ghost Kitchen Counterattack? - pymnts.com

Ghost kitchens could be the next battleground involving Uber and its founder and former CEO, Travis Kalanick.

As you probably heard, a Dec. 24 announcement said he would step down from Uber’s board. He had already reportedly cashed in his Uber shares from some $2.7 billion. This year has been Uber’s first as a public company, and Kalanick’s sales have been a hardship for the firm. The shares have rarely gone for more than its $45 initial public offering (IPO) price. Recently, the number has plummeted to around $31 per share.

“Uber has been a part of my life for the past 10 years,” Kalanick said in a statement. “At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits.” Kalanick was ousted as Uber’s head in June 2017 after a string of scandals rocked the ridesharing firm.

Kalanick, as of late, has been doing work with his new startup CloudKitchens, which has been buying up real estate worldwide. CloudKitchens focuses on providing rental space to restaurants in need of more space for delivery to customers. The firm buys unused buildings near city centers and converts them into kitchens that restaurants can rent specifically to make food for delivery to customers.

Earlier this year, Saudi Arabia’s Public Investment Fund funneled $400 million into Kalanick’s new company, which was the first time the fund made a major investment since the murder of U.S. journalist Jamal Khashoggi last year. The investment was one of the largest ever for a new startup. CloudKitchens has locations in the U.S., China, India and the U.K. and is still growing.

So-called ghost kitchens are a growing part of the food delivery ecosystem — of which Uber Eats is among the biggest, most powerful and most influential participants. “Kalanick is looking to take this business to China. There, the concept is not novel and the competition is brisk,” reads a report from Quartz. It’s still too early to tell if he intends to compete with Uber and Uber Eats in the food delivery ecosystem, though he would now seem free to do so.

Kalanick also has made other investments since leaving Uber. That includes in a trucking and logistics startup some are calling “Uber for trucks.” Kalanick, along with Sequoia Capital, participated in a $7.6 million funding round for Kargo, according to reports. To use Kargo, customers order trucks using an app, but Kargo CEO and Co-Founder Tiger Fang said the scope is wider than that — and that, unlike Uber, Kargo doesn’t work with the truck drivers themselves. Instead, it uses truck operators and third-party logistics.

The idea is to cut out the middleman and allow for more transparency, improved service and a less-costly option for companies, which will translate to more revenue for drivers. Basically, Kargo is trying to streamline the connection between users and the actual logistics operators. Other backers in Kargo include China’s Zhenfund, Intudo Ventures from Indonesia, an investment from the co-founder of North Star hedge fund group Patrick Walujo, along with ATM Capital.

Kalanick’s investment fund is called the 10100 and was founded in March of last year. According to Kalanick, the fund will oversee his for-profit investments as well as his non-profit work. “The overarching theme will be about large-scale job creation with investments in real estate, eCommerce and emerging innovation in China and India,” wrote the entrepreneur. “Our non-profit efforts will initially focus on education and the future of cities.”

The fund name, which Kalanick said is pronounced ten-one-hundred, is a reference to the address where the ex-Uber executive grew up in Los Angeles, the Financial Times reported. In addition to launching an investment fund, Kalanick announced last week he has become a board member of Kareo, the cloud-based software company focused on independent medical practices. Kareo founder Dan Rodrigues co-founded Scour, a music and video file-sharing startup, with Kalanick. It was sued by the music industry in 2000, reported the Financial Times. Kalanick, noted the paper, has been an investor in Kareo for several years, dating back to 2009.

Kalanick might be out of Uber, but he is certainly not out of the digital game.

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December 27, 2019 at 02:37AM
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Uber, Kalanick: A Ghost Kitchen Counterattack? - pymnts.com
"kitchen" - Google News
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