After a new funding round led by SoftBank’s Vision Fund II, the cloud kitchen startup claims to be the Middle East’s second unicorn.
KITOPI, A DUBAI-BASED cloud kitchen startup, recently announced that it completed one of the region’s largest funding rounds to date.
The company, which helps its restaurants partners prepare food for delivery, says that it has raised $415 million from a group of investors. The deal isn’t just significant in terms of its size; it also mints Kitopi as one of the region’s only two unicorns (alongside ride-hailing startup Careem). The startup told Bloomberg that its valuation is now above $1 billion, although did not provide more specific details.
As food delivery has taken off during pandemic, cloud kitchen (otherwise known as ghost kitchen) startups have benefitted from the surge in popularity. Kitopi, which operates more than 60 kitchens across the Gulf, says that its business grew 300 percent last year. It says that it plans to use the fresh capital to accelerate expansion, both in the Middle East and Southeast Asia.
“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,” says Kitopi CEO Mohamad Ballout.
Ballout told Bloomberg that the startup was doubling down on its presence in Saudi Arabia. “We’re going to be putting around $200 million of capital in Saudi Arabia to build out our business there,” he said, and added that the startup expects that Saudi Arabia will account for the majority of the company’s business within the next year.
The deal also marks a first for one of the startup’s investors, SoftBank Vision Fund 2, as it represents the fund’s first investment in the UAE, and one of its first in the Middle East. Vision Fund chief executive Rajeev Misra has previously said that the fund had invested in a Saudi messaging app, although SoftBank has since declined to provide further details.
“We believe Kitopi’s proprietary technology is changing the unit economics of food delivery in providing more choice to more customers, in more places,” says SoftBank partner Faisal Rehman, commenting on the investment. “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.”
Kitopi says its other investors include the Abu Dhabi investment firm Chimera, Abu Dhabi state holding firm ADQ’s venture capital platform Disrupt AD, California-based Next Play Capital, and the UK firm Nordstar.