Food delivery company revenues are expected to reach $164 billion globally by 2024, but beyond delivery fees and service commissions, dark kitchen infrastructure is boosting food delivery margins, albeit in a few different forms.
While first wave dark kitchens involved food delivery companies like Deliveroo setting up commercial kitchens on low-cost urban real estate, to move food production closer to consumers, replacing restaurants, an ecosystem of dark kitchen adjacent startups has since emerged. Virtual restaurant startups such as Kitopi enable established restaurant brands to scale to a new delivery radius overnight, by recreating branded restaurant dishes in their own franchise kitchens. Cloud kitchen operators Karma Kitchen (who raised 2020's largest Series A) lease serviced and stocked kitchen space to other (virtual) restaurants and direct-to-consumer food brands, again undercutting the overheads of a high street restaurant, and bringing wholesale ingredient savings to smaller operators.
The combined value of dark kitchen startups grew faster than the overall food delivery ecosystem last year, up 1.8x year on year to $195B, compared to 1.6x growth for food delivery (to $726B). With social media giant TikTok recently announcing a partnership with dark kitchen startup Virtual Dining Concepts to deliver meals featured on its app, dark kitchen validation looks to still be in ascendancy.
☕️ Starbucks ties up with Meituan to bolster presence in crucial China market via Reuters. Starbucks, which initially began food delivery through a partnership with Alibaba, is looking at new partnership opportunities as sales have fallen in China. Meituan has a 68% market share of the food delivery market in China.
🐓 Cargill leveraging AI tools to optimize broiler production via Food Navigator. The agribusiness giant has been building a portfolio of AI tools to help customers improve efficiency with "actionable insights". Cargill has a patent-pending microbiome analysis tool called Galleon.
🍔 Short sellers tuck into Beyond Meat via The Financial Times. Short positions have increased 40% since October, making Beyond Meat one of the top shorted stocks on Russell 1000 index.
💼 We're hiring! If you are interested in delivering industry-leading research (or working in product, sales or marketing), check out our jobs page, or reply to this email.
Latest foodtech deals
Select deals from last week:
🇪🇪 Bolt, an Estonia-based super app, raised $709 million at $8.4 billion valuation to expand its logistics and food delivery platform. The new funds will go towards building "dark" stores, expand its ultrafast grocery delivery service and scale beyond the 10 markets across Europe and Africa it currently operates in. Bolt more than doubled its valuation since December 2020. It is part of a growing number of super apps globally.
🇺🇸 AcreTrader, an Arkansas-based farmland marketplace, secured $40 million Series B to expand its team, platform, and work closer with farmers to improve market efficiency.
Dealroom clients can browse foodtech startups based on alignment to the UN Sustainable Development Goals. There are 1,519 startups and scaleups that align with at least one of the UN Sustainable Development Goals to the core of their business model.
This is Dealroom's weekly Foodtech newsletter. Get more industry-specific intelligence on the evolving world of Foodtech, emerging trends, and game-changing startups. Delivered on Tuesdays.
Dealroom.co, Cornelis Dirkszstraat 27-2, 1056 TP, Amsterdam, The Netherlands
