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Financing

Kitchen United gets another $40M

The investment will help the provider of ghost kitchens continue to grow and open its first locations in New York City.
Photograph courtesy of Kitchen United

Kitchen United, the growing provider of locations used by chains to serve off-premise customers, said on Thursday it has closed on a $40 million Series B funding round that promises to take its ghost kitchens to more locations, including New York City.

RXR Realty, one of New York’s largest real estate investors and developers, led the funding round along with GV, the venture capital arm of Alphabet. Funds managed by Fidelity Investments Canada ULC, DivcoWest and G Squared, along with existing investors and the company’s founders, also participated in the funding round. The investment follows a $10 million funding round last year.

The deal with RXR will open the door to New York, with Kitchen United centers opening in RXR and other properties in the area. Kitchen United is looking for “attractive properties” in major markets such as New York, Chicago, Los Angeles, San Francisco and Boston.

“We share Kitchen United’s vision of the future of the restaurant industry and believe the consumer shift toward off-premise dining is already having a huge impact on both residential and commercial real estate,” said Scott Rechler, CEO of RXR Realty, in a statement.

The funding will continue Kitchen United’s fast growth. The company opens commercial kitchens in central locations, providing chains and independents locations for them to serve delivery and off-premise customers without building restaurants themselves.

It also provides chains with a relatively low-cost way of entering into new markets. Each kitchen center houses 10 to 15 restaurant brands. Dog Haus, Wetzel’s Pretzels and The Halal Guys are among those that use the “kitchen as a service company.”

The Pasadena, Calif.-based company has an aggressive growth plan to build 400 kitchen centers and 5,000 kitchens in the coming years. The company currently has kitchens in Pasadena and Chicago, but will soon open locations in Scottsdale, Ariz., and Austin, Texas, with sites under construction in Chicago, San Francisco, Los Angeles and other markets.

New York is considered a priority market. “In just over two years, we have only scratched the surface on the massive opportunity for brands to serve their guests where they want to be served, which is increasingly outside their traditional four-wall space,” CEO Jim Collins said in a statement.

The growth of companies like Kitchen United come as the industry is increasingly focused on takeout—it is the fastest-growing part of the industry and includes sales from delivery. Growth in takeout has upended the restaurant business, forcing many companies to alter business strategies to meet this demand.

Companies believe that virtual kitchens such as Kitchen United could give restaurant brands locations for delivery customers, in particular, without disturbing existing business.

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