Reef Technology, which uses parking lots to offer services such as ghost kitchens, has raised $700 million.
The funding was led by Mubadala Investment Company, a sovereign wealth fund based in the United Arab Emirates. Giant tech investor SoftBank Vision Fund also contributed, along with Oaktree Capital Management, UBS Asset Management and Target Global.
The major investment is one of the biggest bets yet on the ghost kitchen model, a key part of Reef’s strategy. The Miami-based company uses its network of more than 4,500 parking lots to create what it calls logistics hubs. These can include modular, off-premise-only “neighborhood kitchens” for brands including Nathan’s Famous and BurgerFi. Reef operates those kitchens as licensees.
The company has more than 100 neighborhood kitchens in about 20 markets nationwide. It also uses the hubs for micro-fulfillment, COVID testing, pop-up clinics and vertical urban farming.
Investors praised Reef for bringing food delivery and other services closer to consumers.
“The concept of transforming infrastructure to better connect the origin of production with the destination of consumption resonated with us,” said Adib Mattar, Mubadala’s head of private equity, in a statement. “Reef is strongly positioned to serve communities where they have key infrastructure, proving essential to food delivery, package delivery, grocery delivery and healthcare.”
Reef will use the funds to expand its parking lot network and make technology improvements, the company said.
“We are excited for this next stage of growth and are committed to continue learning, listening and working with our communities to reimagine urban real estate into localized and networked infrastructure that entrepreneurs and cities can use to deliver goods and services sustainably and directly to our neighborhoods,” said Reef CEO Ari Ojalvo in a statement.
In a separate move, Reef and Oaktree formed a $300 million venture to acquire strategic real estate to help Reef grow.
Restaurant demand for delivery-only kitchens has skyrocketed amid the pandemic, with some ghost kitchen companies reporting waiting lists for future locations. Those providers are firmly in growth mode, with Kitchen United, CloudKitchens and now Reef demonstrating aggressive expansion plans.
Reef’s model is a bit different from those others, which allow restaurants to rent kitchen space in their large, multiunit facilities. But all depend on continued consumer demand for delivery, a service that has grown right alongside ghost kitchens amid the pandemic.