Kitchen United raises $100M Series C

Kitchen United, the ghost kitchen operator and technology provider, announced a $100 million Series C financing, comprised entirely of equity, says CEO Michael Montagano.

Why it's the BFD: Ghost kitchens, also known as cloud kitchens or virtual kitchens, are projected to become a $1 trillion industry by 2030 (but that figure encompasses more than restaurant-related ghost kitchens), according to Euromonitor.

Yes, but: While the sector generated about $52 billion in sales in 2021, not all ghost kitchen operators are faring well. Butler folded after raising $50 million, TechCrunch reported.

Of note: Montagano declined to comment on financials but said Kitchen United's post-money valuation eclipses that of its most recent round. The company was valued at $140 million in 2019 after raising a $40 million Series B, according to PitchBook.

• Kitchen United has no debt and has grown 100% year over year for four consecutive years, which includes this year, Montagano says.

Details: New investors include strategics such as Alimentation Couche Tarde and its subsidiary Circle K, Kroger and Burger King parent Restaurant Brands International.

• That's in addition to real estate operators Simon Property Group and Phillips Edison & Co., as well as supply chain manager The Havi Group and VC firm B. Riley Venture Capital.
• A full slate of returning investors participated, as did NFL Super Bowl MVP Peyton Manning.

Flashback: Kitchen United began raising its Series C at the beginning of the year, Montagano tells Axios.

• The company targeted $100 million from the beginning and was able to maintain its desired valuation through negotiations, he says.
• Proceeds will primarily invest in further developing its tech stack, as it provides software to other ghost kitchen operators such as New York City's Hudson Yards.

What's next: Capital will also go toward physical expansion from its current 15 locations and delivery capabilities.

• The company is putting the finishing touches on five new sites.
• It plans to open a total of 500 over the next five years, with a partnership with Kroger to help it do so.

State of play: Competitors include Uber co-founder Travis Kalanick's CloudKitchens, which raised $850 million last year, as well as Guy Fieri's Guy's Flavortown Kitchens, and Reef, among many others.

The intrigue: Given how increasingly crowded the space is, "We anticipate further market consolidation, and will continue to analyze new opportunities to partner with other like-minded companies," Montagano says, referring to acquisitions.

• Last year Kitchen United acquired software and ghost kitchen developer Zuul.

What they're saying: "We aren’t the ghostly ghost kitchen. We want to be in the best trade areas," says COO Joy Lai of the company's ambitious expansion.