Former Uber CEO Travis Kalanick's ghost kitchen and software company is transforming restaurants.
In 2021, Kalanick raised $850 million at a $15 billion valuation from backers including Microsoft.
The stealth company has attracted top tech talent and some controversy among staff and customers.
Travis Kalanick is trying to reinvent the restaurant industry after upending the global taxi business.
Kalanick, who stepped down as CEO of Uber in 2017, took over a small startup called City Storage Systems. He has since built the company into a global ghost kitchen leader – though one unrecognizable to most consumers, because the Los Angeles-headquartered company tries to stay out of the media spotlight.
CSS operates two main businesses. One, a physical ghost kitchen arm called CloudKitchens in the US, transforms mainly warehouses into private kitchen spaces that big companies and mom-and-pops alike can rent. The other business, a software service called Otter, runs a restaurant order management system that aggregates purchases from platforms like DoorDash and UberEats.
Kalanick leveraged the pandemic-induced delivery boom to expand quickly, buoyed by an $850 million fundraise in late 2021. But the business has faced controversies internally and externally. Culture and customer issues have both led to lawsuits. Competitors, like SoftBank-backed Reef, have also drawn controversy for operational and other problems.
Since early 2021, Kalanick's representatives have declined Insider's interview requests.
In late 2021, CloudKitchens' parent company raised $850 million at a $15 billion valuation, Insider exclusively reported. Investors included former Uber backer Microsoft, according to later Financial Times reporting.
The funding round tripled the startup's last publicly-known valuation. After Kalanick exited Uber and joined City Storage Systems, he brought in $400 million from Saudi Arabia's sovereign wealth fund, the Wall Street Journal reported in 2019.
Around the time of the latest fundraise, the company also named a new chief financial officer. John Curran joined after more than a dozen years with Amazon.
Thousands of employees work for City Storage Systems. But they're not allowed to add where they work to LinkedIn, thanks to Kalanick's penchant for secrecy. He wants to keep employees out of the crosshairs of reporters, recruiters, and competitors. One former employee likened the secrecy to that of the CIA.
In spring 2021, more than 300 corporate employees left the company, some of whom told Insider they quit over paltry bonuses, a challenging culture, and a contentious new leveling system. Since then, the company has undergone small rounds of layoffs, including some recruiters.
Some entry-level sales employees have struggled at Otter, Insider reported. The software unit created a two-month training program in 2022 to teach newbies skills like cold-calling and how to use Salesforce. Half of the 300 recruits who started the program graduated, and by August 2023, fewer than 20 remained at the company. Participants and managers said the program failed to teach real skills and was marked by chaos, including unreachable goals and a party culture.
CloudKitchens US locations
A 2021 Insider analysis showed how CloudKitchens (and competitor Reef) snapped up properties across the US.
Since the 2021 count, the companies have added more sites. CloudKitchens owns at least 90 locations across the country, though some are not yet open.
Some of CloudKitchens' locations have rankled neighbors, Insider previously reported. They were surprised to see long-vacant warehouses turned into busy food pickup hubs, including on partially-residential streets.
"This is a very disruptive business model. To barrel into a neighborhood unilaterally with some sense of entitlement because it's a free market — you may have the law on your side, you may not, but you certainly won't have neighbors and elected officials on your side," a Miami politician told Insider in 2021.
Do you work at CSS or have a tip about the ghost kitchen industry? Contact reporter Meghan Morris using a nonwork phone at 646 768 1627 (call/text/Signal/Telegram).
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