Virtual Kitchen Co Raises $15 Million In Funding

By Noah Long ● November 19, 2019
  • Food tech and logistics company Virtual Kitchen Co announced it raised $15 million in Series A funding

Virtual Kitchen Co — a food tech and logistics company founded by Andro Randonich, Ken Chong, and Matt Sawchuck — announced it raised $15 million in Series A funding led by Andreessen Horowitz and Base10 Partners. Some of the other investors that joined the round include Rappi co-founder Sebastian Mejia, former Yelp SVP of Engineering Michael Stoppelman, Opendoor co-founder JD Ross, and Maple VC founder Andre Charoo. In conjunction with this funding round, Andrew Chen from A16z and Adeyemi Ajao from Base10 will be joining the board. Including this round of funding, Virtual Kitchen Co has raised $17 million in total funding and it will use the funding to build new facilities, R&D, and hiring.

“We were surprised to see our favorite restaurants growing rapidly on Uber Eats, but when we talked to them, they told us bottom-line wasn’t growing with the current brick and mortar setup,” said Virtual Kitchen Co co-founder and CEO Ken Chong. “Consumers love the convenience of food delivery apps, and demand keeps growing. We want to equip food entrepreneurs with the best platform to take advantage of the food delivery economy.”

Chong had formerly led the Marketplace product teams at Uber and developed its next-gen network pricing, marketplace health, and real-time pricing systems. And Sawchuk spent 6 years at Uber developing a number of large business lines, including UberX and UberEATS in San Francisco. Plus Radonich built one of the largest high-end corporate catering businesses in the Bay Area over the past decade.

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“In what is a true breath of fresh air for a Silicon Valley-based company, Matt, Ken and Andro got together to help food entrepreneurs not only survive but thrive in the food delivery economy,” commented Adeyemi Ajao, Managing Partner at Base10. “They know too well the unintended consequences that unchecked ‘disruption’ and ‘automation’ could have on an industry. We are pleased to be partnering with the team as they continue to scale.”

Virtual Kitchen Co has a goal to empower restaurants to expand delivery coverage and bring great food to more people. And the company provides a turnkey solution to restaurants, combining space, operations, and technology that allows restaurants to increase their delivery presence with minimal costs.

The company already has multiple delivery-optimized kitchens already in San Francisco and it will open another dozen Bay Area facilities in the next 6 months. Some of the early restaurant partners include local favorites such as DOSA, Big Chef Tom’s Belly Burgers, Poki Time, and more.

“For a few years now we’ve seen customers opting for more casual dining and the convenience of delivery,” added Anjan Mitra, DOSA owner and Executive Chef. “Combined with rising costs, labor shortages, and changes in the business climatewe have had to evolve DOSA’s business model away from full-service restaurants. As we explored various options, Virtual Kitchen was the only partner who had a feasible solution for our customers, while also making financial sense for us. They will seamlessly give us the reach across the Bay Area, without the risky financial investment and operational costs required by other dark kitchen providers. Virtual Kitchen is a wonderful partner that has designed a solution that respects innovative restaurant brands, and also understands the challenges of running a neighborhood restaurant.”

With the popularity of food delivery apps, restaurants have been facing increasing operational challenges. However, food delivery apps also bring an opportunity to reach many more customers. This shift within the industry has caused uncertainty for owners and without proper adjustment, it could be disastrous for restaurant owners.

“Local food brands are beloved by consumers, but can always use a leg up in their business and operations. It’s fantastic to see how our cities’ best restaurants can scale beyond their retail footprint using food delivery,” explained Chen. “We’re seeing a ton of innovation happening rapidly in this space right now. The Virtual Kitchen team has the perfect blend of expertise to build this startup, and we couldn’t be more excited to start our journey with them.”