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Will Ghost Kitchens Flame Out? 🔥

Will Ghost Kitchens Flame Out? 🔥
December 16, 2021

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In a former life, I was a small food-business owner in the Bay Area. Using family recipes to disrupt the reputation of English food, I served up handheld meat pies to hungry tech employees, beer connoisseurs, and tired festival attendees. Without a bank loan or trust fund, I did what many restauranteur hopefuls do: I opened a pop-up and delivery-only business out of an incubator kitchen. Ghost kitchens, as they’re now known, are an increasingly popular business model, collecting rent from a multitude of makers, all hoping to turn meat and potatoes (or flour and butter) into viable businesses. Tending to the market of misfits crazy enough to start food businesses, these kitchen operators handle the insurance, licensing, and upkeep of fridges, freezers, and stoves.


Reef is one such company. It allows food entrepreneurs to maintain a home base in densely populated neighborhoods to grow their delivery businesses. The company also partners with existing kitchens to bring in those kitchens' own brands for meal prep and delivery. But Reef is currently under fire for multiple incidents of explosive propane burners resulting in injuries.

Regardless, Reef has raised over $1.5BN from Softbank and others, but whether the company will deliver VC expected returns remains to be seen. Reef is cooking up more locations and making strategic acquisitions of parking businesses to fuel its real estate desires and diversify its revenue streams.  However, issues like slow wait times for permitting and towing fees necessary to access clean water for the trailers are eating away at profits. There’s also always the issue of food quality, with even big-name brands like David Chang’s Fuku receiving lukewarm reviews.

Still, as the pandemic rambles on and the cold winter months halt indoor dining plans, ghost kitchens are serving up iterations on the business model. For more companies in the realm, search the “ghost kitchen” keyword on our database.

Cyber (in)security
Researchers say the latest cyberattacks from China pose a dire threat.
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WSJ]
a16z loses crypto partner
Legendary crypto investor Katie Haun is striking out on her own.
[Axios]
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Funding & Deal Highlights:
 

Device Authority raises $2.9MM from Venafi

PaaS • Equity • Fremont, CA
 

Sounding Board Labs raises $30MM from JAZZ Venture Partners

E-Learning • Round B • Aliso Viejo, CA
 

Quavo raises $6MM from Fintop Capital

Fintech • Round A • Wilmington, DE


Hologram raises $6.8MM from Founders Circle

Telecomm • Round B-2 • Chicago, IL


Tagger Media raises $15Mm from Five Elms Capital

Influencer Marketing • Round B • Santa Monica, CA


AnHeart Therapeutics raises $61MM from Octagon Capital

Bio Pharmaceuticals • Round B • New York, NY


Cadence Solutions raises $100MM from Coatue Management

Telehealth • Round B • New York, NY


Pair Eyewear raises $60MM from Rick Yang

Eyewear • Round B • New York, NY


Andie raises $18.5MM from Marcy Venture Partners

Swimwear • Round B • New York, NY


Enquire AI raises $5.5MM from Uzabase

Knowledge Management • Round A • Washington, DC

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