$415 million Series C funding creates new Dubai Unicorn
Dubai-based cloud kitchen startup, Kitopi has raised $415 million in a Series C led by SoftBank, making it one of the largest-ever financing rounds raised by a venture-backed company in the Middle East & North Africa (MENA). The valuation rumoured to be at around $1 billion, which makes it the third Middle Eastern unicorn and the fastest one yet.
Kitopi operates a network of over 60 cloud kitchens in the United Arab Emirates, Saudi Arabia, Kuwait, and Bahrain. The three-year-old startup partners with F&B brands to help them expand their reach through its cloud kitchens. The startup takes care of all the operations from the preparation of food to its delivery while working with the restaurants on a revenue-share basis. According to its website, it works with more than 200 brands including Shake Shack, Papa John’s, Jollibee, Nathan’s Famous, iHOP, and several others.
Faisal Rehman, Managing Partner for SoftBank Investment Advisers, said, “Constraints placed on the hospitality sector by the global pandemic have rapidly catalysed the value proposition of cloud kitchens for customers and restaurant brands. We believe Kitopi’s proprietary technology is changing the unit economics of food delivery in providing more choice to more customers, in more places. Moreover, we are delighted to welcome Kitopi as SoftBank’s first UAE-headquartered investment and are excited by the company’s growth prospects in the region and beyond.”
Since its launch three years ago, Kitopi’s kitchens have been able to double the order volume while reducing the preparation time by 40 percent. The startup has also expanded into subscription-based meal plans and grocery delivery in the last twelve months. Its overall business has grown 300 percent in 2020.
Cloud kitchens, facilities built to prepare food specifically for delivery, have benefited from the shift to online services during the Covid-19 pandemic. Allied Market Research in India has estimated that the global cloud kitchen industry could be worth about $71 billion by 2027.
Mohamad Ballout, co-founder and CEO of Kitopi, said, “These past 3 and a half years have taught us the importance of pursuing our vision with grit, focus, and building a high-performance culture. We are humbled to work with world-class partners such as Softbank, Chimera, DisruptAD, and others. What this shows is not only a great commitment to our company but to the industry and the region. Our focus now is to expand our presence within the Middle East and to Southeast Asia while continuing to innovate and pioneer in the cloud kitchen space. We are excited to take what we do to other parts of the world.”
Kitopi had previously raised $60 million in a Series B in early 2020.