This is an English adaptation of a FoodBud historical article originally published on September 8, 2022.
Sina Tech reported on September 7, 2022 that Uber co-founder Travis Kalanick was quietly building out foodservice and convenience-goods infrastructure in Latin America, aiming to capture growth in the region's ecommerce and delivery markets.
Drawing on his UberEats experience, Kalanick had spent the previous three years acquiring and building localized cloud kitchens in Latin America through CloudKitchens, as part of a broader attempt to create a global network of food-delivery hubs.
CloudKitchens acquires real estate and converts it into delivery-only kitchens or pickup locations.
Kalanick also established Pik N' Pak, a related business storing convenience-store goods such as pet food and medicine for nearly 50 CloudKitchens centers across 11 cities in Brazil, Mexico and Colombia. Like cloud-kitchen meals, these items were delivered to consumers by local delivery platforms.
Former CloudKitchens employees said the relationship between Pik N' Pak and CloudKitchens had not previously been disclosed. They described the structure as intentional, designed to keep local entities separate from the parent company and avoid direct association with Kalanick.
One former manager involved in CloudKitchens' Latin America business said that when a CEO is as influential and controversial as Kalanick, the company may not want its brand closely tied to him.
Kalanick was forced out of Uber in 2017 after a series of scandals. He launched CloudKitchens in 2018 and pushed rapid global expansion. After an $850 million funding round in November 2021, CloudKitchens was valued at $15 billion.
Sources said CloudKitchens had more than 4,000 employees globally. The company declined to comment.
Former employees described a secretive culture. CloudKitchens reportedly barred staff from listing the company on LinkedIn, requiring them to use the phrase "stealth startup" instead.
One former senior employee said Kalanick wanted to grow CloudKitchens in Latin America and dominate the sector without attracting too much attention.
People close to Kalanick said this approach could also hold the business back and give CloudKitchens an Uber-like reputation. Former employees said departments knew little about other parts of the business, while tenant turnover at CloudKitchens centers was very high.
Two former senior employees with direct knowledge of operations said CloudKitchens had about 500 employees in Latin America and operated roughly 70 centers across eight countries, including about 1,800 kitchens.
Pik N' Pak used excess space in kitchen facilities, including basements and corridors, to store convenience goods such as over-the-counter medicine and pet food.
In marketing materials, Pik N' Pak said it gave retailers access to millions of customers. Retail brands could rent shelf space and list products on popular Latin American delivery apps such as Rappi and Cornershop, which handled payments and delivery.
CloudKitchens made two acquisitions in the region:
The Cocinas Ocultas team was tasked with developing CloudKitchens' South American business. Under the Cocinas Ocultas brand, CloudKitchens operated in Colombia, Peru, Costa Rica, Panama, Chile and Ecuador. In Mexico, it used the VirtualKitchens brand.
In Brazil, CloudKitchens operated as Kitchen Central and had become a market leader, according to Renato Avo, department-store business director at consulting firm 360 Varejo.
A study by GS&NPD and the Brazilian Foodservice Institute found that Brazil's delivery-market spending rose by nearly one quarter in 2021 to almost $7.8 billion. Avo estimated that cloud kitchens accounted for 15% of that market.
Cloud-kitchen growth in parts of Latin America also triggered controversy.
In Sao Paulo, South America's largest city, residents protested new cloud-kitchen facilities in affluent neighborhoods. The city government proposed local regulation for cloud kitchens and temporarily suspended new license issuance earlier in 2022.
Residents cited noise, kitchen fumes and delivery riders as concerns.
Sao Paulo city council member Cris Monteiro said CloudKitchens had maintained communication before the dispute escalated, but she questioned whether the company was willing to reach a solution. She said the company's position that it was legally established did not show enough willingness to collaborate with local communities.
A former senior CloudKitchens employee in Latin America said the company was sensitive to local business practices. Others close to Kalanick said old habits could persist. One former executive said Kalanick's main lesson from Uber was not to trust the media or venture capitalists.
Note: Financing, acquisition and valuation figures are historical as reported in 2022.