Microsoft Backs Uber Founder Kalanick’s Latest Venture CloudKitchens

Uber co-founder and ex-CEO Travis Kalanick once again has the financial backing of tech giant Microsoft, this time, for his new venture CloudKitchens.

Microsoft is the first U.S.-based investor that backed Uber and also invested in Klanick’s dark kitchen startup, Financial Times reported on Wednesday (Sept. 7) citing unnamed sources with insider information.

CloudKitchens closed an $850 million funding round last November at a $15 billion valuation. Microsoft participated in the round, which was a combination of debt and equity, the sources told FT.

The infusion of capital was used to help the company expand with more than 4,000 employees across the U.S., Latin America, the U.K. and the Middle East.

See also: Back of House Goes Front Burner as Smart Kitchens Cook Up Better Restaurant Experiences

Ghost kitchens — also known as cloud kitchens and dark kitchens — initially hit the scene in 2015 and took off in March 2020 when the pandemic took hold and the demand for delivered restaurant meals skyrocketed.

The concept involves buying or leasing warehouse, storefront, or other space and converting the premises into a massive kitchen for preparing food for multiple restaurants simultaneously specifically for takeout orders.

Microsoft first backed Uber in 2015 with roughly $100 million when it was valued at $50 billion, FT reported. Despite Kalanick’s failings and scandals at Uber and his ultimate exit from the company he founded, Microsoft is still supporting him in this next venture, FT reported. It’s not the case with other big-name investors from San Francisco.

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CloudKitchens is reportedly having some in-house issues, with four former employees telling FT that the company has the same cultural issues that Uber had. A senior level employee who left CloudKitchen called it “the most toxic place I’ve ever seen or experienced.” There has been a mass exodus of employees, they told FT.