The pandemic led to the rise in popularity of shared workspaces (also known as ghost kitchens or cloud kitchens), which allow restaurants to prepare meals for delivery.
For small independent restaurants that can't afford to expand, Uber Eats alumni Matt Sawchuk and Ken Chong came up with a different approach. All Day Kitchens was founded by Matt Sawchuk and Ken Chong in 2018. They wanted to work with restaurants to share their food throughout the city using a network satellite kitchens. This allows them to avoid any upfront costs.
Distributed kitchens can be found in residential or business areas to make them more accessible to customers. TechCrunch CEO Chong explained that when a restaurant joins the platform, all their food is delivered to all locations. This streamlines how restaurants can expand in large areas and delivery zones. Customers can order from multiple restaurants at once and all will be delivered together using this model.
He said that consumers preferred pre-COVID, and that the entire restaurant industry was not the best model to meet digital demand. We wanted to create a solution that would work for restaurants with warehouse ghost kitchens. We instead created a platform for micro-fulfillment to help them expand their reach.
The food tech and logistics company, Lightspeed Venture Partners, announced Friday a $65 Million Series C round of financing. This financing included participation from GIC. It will be used to expand into new markets, R&D, and hiring. Along with existing investors Andreessen Horowitz and Founders Fund and Khosla Ventures, Base10 and new investors Tishman Speyer, Lime CEO Wayne Ting, and Forward co-founders Adrian Aoun, Ilya Abyzov, participated in the round.
All Day Kitchens has now raised $102.5 million in total funding. This is the latest company to be funded in the hot ghost kitchen industry, which includes JustKitchen, Muy and robotic kitchens such as YPC.
Chong stated that the company has doubled the number satellite kitchens it operates this year. It now has more than 15 locations in the Bay Area and Chicago. New markets are expected to open in Texas and Southern California next, as well. It also hires at its San Francisco headquarters and in new markets.
Although the pandemic in the world was difficult for partners, All Day Kitchens saw a fourfold increase in the number of members joining the platform over the past year. It has partnered with brands such as Honey Butter Fried Chicken and Mott St. In the last 18 months, its revenue has increased 18-fold.
Chong stated that the part that surprised and struck us most was the notion that restaurants are late adopters. It is similar to Uber in that no one was creating something like this for them. Many apps are designed for consumers. That is why we focus on restaurants. Our restaurant partners are always striving to improve.
Alex Taussig, Lightspeed partner, will join the company's board of directors as a director, while GICs Jeremy Kranz will be joining the board as an observer.
Taussig and Chong met over a year ago. Chong stated that Lightspeed has made many investments in the food and commerce sector over the past decade. Taussig was interested in finding ways to address the delivery demand. Taussig recalls looking at various models and startups, but was overwhelmed by warehouse models.
Taussig was able to see something new when he spoke to Chong about All Day Kitchens. He saw a model that focuses on getting food closer to the customers. It was not just about the quality of the food but also how fast it could be delivered so that they didn't have to wait for items in their cars for over an hour. He said that the platform would see higher usage.
Taussig said that I was overwhelmed by this insight and spent over a year watching Ken build his company. It was also significant because most companies are founded in the Bay Area. This market is huge and almost unlimited. It is also faster growing than the independent market. It will be difficult for any other company to do what All Day Kitchens does.