Travis Kalanick has quietly built a large food and convenience goods business across Latin America as the Uber founder seeks to capitalise on the region’s fast-growing ecommerce market.
The billionaire has rapidly expanded his US-based CloudKitchens start-up by buying and building local “dark kitchens” in Latin America over the past three years as part of an attempt to build a worldwide network of food delivery centres, leveraging his experience of building Uber Eats during his tenure as chief executive.
Alongside the dark kitchen business, which buys property to use as space to prepare delivery or pick up takeaway food, he has launched Pik N’ Pak. This business stores convenience goods, such as pet foods and medicine, from almost 50 CloudKitchens locations across 11 cities in Brazil, Mexico and Colombia. As with the kitchen operations, Pik N’ Pak goods are sent to customers by local delivery app companies.
The link between Pik N’ Pak and CloudKitchens, previously undisclosed, comes as part of a deliberate push to expand secretively, with local entities kept distant from the parent company to avoid being linked to Kalanick, according to three former CloudKitchens employees, who spoke on condition of anonymity because of strict non-disclosure agreements.
“When you have a CEO as impactful and controversial as Travis, he does not want to associate the brand to him,” said one former manager who worked on CloudKitchens’ Latin America business.
It comes as Kalanick has quickly grown CloudKitchens globally since taking over the business in 2018, after being ousted from Uber following myriad scandals in 2017. CloudKitchens was valued at a reported $15bn in November, following an $850mn funding round. Details of the round were first reported by Business Insider.
CloudKitchens has more than 4,000 employees globally, according to two people familiar with the business.
CloudKitchens declined to comment.
The secretive culture reflects Kalanick’s approach to business following his acrimonious departure from Uber. Employees are forbidden from mentioning they work at the company on LinkedIn, instead listing “stealth start-up” as their place of work — a term typically reserved for companies yet to launch.
“It’s attached to how he got attacked in the past,” said one former senior employee at CloudKitchens. “The Uber situation was not nice to him. He wanted to grow [CloudKitchens in Latin America], he didn’t want to attract too much attention, he wanted to dominate the sector.”
But people close to the entrepreneur said his approach risked hindering the company’s growth and bore the hallmarks of his time at Uber. Notorious Uber company principles such as “Always Be Hustlin’” have been codified at CloudKitchens.
Former employees said divisions of the company were kept in the dark about related parts of the business, contributing to extremely high tenant turnover in its facilities.
“For me to grow, I need to understand how operations is growing, or how finance is growing,” one person said. “But it was very siloed.”
CloudKitchens employs about 500 people in Latin America, running approximately 70 locations, containing 1,800 individual kitchens, across eight countries, according to two former senior employees with direct knowledge of the company’s operations.
Pik N’ Pak uses surplus space in the company’s kitchen facilities — such as in the basement or along corridors — to store convenience goods such as over-the-counter medicines, pet food and sex toys. In promotional material, Pik N’ Pak says it offers retailers access to “millions of customers”.
Retail brands can rent shelf space and list their goods on Latin American food delivery apps such as Rappi or Cornershop, which handle customer payment and delivery.
CloudKitchens’ growth in the region was spurred by at least two acquisitions. In 2020, the company bought Mexico-based kitchen group Nano for a reported $20mn, according to data from PitchBook.
In 2019, in a deal not previously reported, CloudKitchens acquired Colombia-based kitchens business Cocinas Ocultas, founded a year earlier by Italian entrepreneurs Raffaele Sertorio and Edoardo Dellepiane.
The Cocinas Ocultas team was tasked with developing CloudKitchens’ business across the continent. Under the Cocinas Ocultas brand, CloudKitchens now operates in Colombia, Peru, Costa Rica, Panama, Chile and Ecuador. In Mexico, the company trades as VirtualKitchens.
In Brazil, CloudKitchens operates as Kitchen Central and is a market leader, according to Renato Avó, groceries director at consultancy 360 Varejo. Food delivery spending in the country rose by almost a quarter last year to R$40.5bn ($7.8bn), according to a study by GS&NPD and the Foodservice Institute Brazil.
“Dark kitchen operations are expected to account for around 15 per cent of this total,” said Avó.
But the growth of dark kitchens across Latin America has caused controversy in certain cities. The proliferation in São Paulo, the largest city in the Americas, sparked objections from residents living nearby, with banners against new facilities appearing in well-heeled neighbourhoods.
The town hall has proposed local regulation of dark kitchens and earlier this year placed a temporary ban on the issue of new licences.
People have complained about noise, smells, smoke and motorcycle drivers — known colloquially as motoboys — waiting outside to collect orders. One unhappy local said his son had been nicknamed “bacon” and bullied in school because of the odour on his clothes, according to Cris Monteiro, a city councilwoman.
She said the company had been in contact before the controversy erupted but questioned its willingness to reach a compromise.
“I understand the position of the entrepreneur. They say they are legally established. For me, this answer doesn’t show a desire to co-operate,” she added. “I don’t see them wanting to resolve the problem together with the community.”
One former senior employee for CloudKitchens in Latin America said the company had become more sensitive to local business practices. But others close to Kalanick warned old habits might endure.
“The only thing that Travis learned about his time with Uber is not to trust the press, and not to trust venture capitalists,” said one former senior figure at the company.
Travis Kalanick expands secretive kitchen venture across Latin America Republished from Source https://www.ft.com/content/162460f3-5707-4857-9676-70aa1d9df203 via https://www.ft.com/companies/technology?format=rss