Kbox Global, the UK startup converting underutilized commercial kitchen space into take-away hubs to help existing kitchens generate much-needed revenue, has raised £ 12m in new funding. The round is led by Balderton Capital and follows a £ 5m investment by early Deliveroo backer Hoxton Ventures, announced in July.
With the goal of building and expanding the so-called “Dark Kitchen” model, creating new first-delivery restaurants and brands based on Deliveroo and Uber Eats, Kbox’s “Host Kitchen” technology and unique business model is leveraging capacity in existing commercial kitchens such as those found in pubs, hotels, restaurants and even supermarkets.
“The reality is that most restaurant and commercial kitchens, be it in hotels, pubs, fitness studios, catering kitchens or supermarkets, are underutilized,” explains Kbox founder Salima Vellani. “The model is out of date. A very expensive location with a brand that can’t change if food trends change. The result is ambitious and successful food suppliers unable to capitalize on the fast-paced delivery market. So we fixed that. “
On the demand side, Kbox has developed a number of multi-kitchen delivery-focused grocery brands “so kitchens can serve more local people more easily and quickly adapt to demand and taste changes,” she says. “And on the supply side, our technology platform digitizes the kitchen operation in order to make it efficient.”
However, Vellani claims that what makes Kbox special is the AI and machine learning technology that enables advanced analytics. In this way, the startup helps kitchens find the right food brands for their local market and then “future proof” them by using data analysis to keep the menus up to date without the need for a data scientist. “With our AI, we can also forecast demand for each kitchen, which in turn minimizes waste, improves staff utilization and morale, and thus improves the profitability of every guest kitchen,” she explains.
To that end, according to Vellani, there is no upfront cost to franchise Kbox brands and technology, as well as “no investment” in kitchen upgrades or equipment. In addition, Kbox generates revenue per order, so it’s only beneficial when the kitchen is making money. In other words, one of the greatest benefits is that there is little risk to a host kitchen when working with Kbox.
“I remember having a conversation with the senior EPP of one of the world’s most famous hotel owners last week and he said to me, and I paraphrase, ‘So this is basically a risk free model that has absolutely no disadvantages for us hat – the only thing i can see when this doesn’t work is that you just highly qualified my staff. I will make sure that all of my hotel owners speak to you, ”says the Kbox founder.
Meanwhile, there doesn’t seem to be an exactly equivalent offering in the dark kitchen space, although there are several heavily funded players looking at the real estate angle – a kitchen rental model, if you will. Others build dark kitchen operations and license brands from third parties or create their own brands.
Vellani adds: “We are at a very early stage of massive change not only in the restaurant industry, but also in the hospitality sector as a whole. Covid merely accelerated a shift that we’ve already seen, but it also highlighted a very relevant problem: These industries have razor-thin margins that are unsustainable and only Kbox is really focused on getting existing food operators to get started with the first delivery time to enable without incurring great costs, by using what you already have. “
So far the model seems to be working – hence today’s capital injection. So far, Kbox has partnered with kitchens in London, Manchester, Liverpool, Glasgow, Edinburgh and Brighton and says it will be on track for 2,000 ready-to-use kitchens in the UK before the end of 2021. In addition, an international introduction of the model. Franchise agreements are currently in progress in Australia and India and will be concluded this month. Another 8 countries are to be introduced next year.