Hey guys, welcome to CNBC. Today, we're taking you inside the world's leading cloud kitchen KITOPI.
With options for food delivery booming, this Dubai-based startup is taking advantage of
all of that demand, is now looking to raise more cash and seriously scale up.
Moe Ballout founded KITOPI in January 2018 with one mission, to satisfy the world's appetite.
So how do you do that? Turns out, it's not just about food.
It's about data, speed and accuracy.
When we first started, I never thought that the number one problem in food is
actually missing items, that you as a customer would have something missing in your order.
So, it's really looking at, how do you solve the issues of quality, issues of speed,
issues of availability for the delivery world?
Which is very different to solving it, when it comes down to a brick-and-mortar dining business.
How many brands do you have at one time in this space?
So, we have 60 brands in this site,
and we can have anything from 40 to 70 brands in any given sites.
Anything from like healthy food brands, salad brands, burger brands,
any cuisine type you can have.
So, this is a space of about 2,000 square feet. That's not that big, really.
It's all about optimizing the space to really
allow us to manage the quality and speed of preparing things.
How many meals in one day are we talking about?
So, a typical kitchen of ours does around 3,000 orders a day.
So how do you make sure that people aren't missing items?
So, the way it works is when the chef prepares the item,
they barcode everything that comes out, and everything goes along the conveyor.
As soon that goes out, they scan
and make sure that everything's actually in that order that's meant to be in it.
At what point do you think we could potentially be fully automated?
Key parts of getting into full autonomous cooking is for us to really consolidate the supply chain,
and really change cooking techniques, and for at least 40% of our products,
we've been able to achieve that.
The goal is within 12 months to have a fully autonomous kitchen.
What's the biggest challenge in your view in terms of that scaling?
So, the complexity of being able to cook multiple different items
in one kitchen with speed is a very complex problem to solve.
So, the way we like to look at a successful order is eight minutes preparing the food,
one minute packing it and driver waiting time under two minutes.
That’s incredible.
So that's kind of the goal. Keep the keep the whole entire experience 11 to 12 minutes,
allowing the customers to get food under 30 minutes.
We've gotten really close to cracking that at scale.
The reality is the next big problem is to make sure drivers are not waiting for the food,
and drivers are able to pick up food really fast.
That's where we develop a lot more software and helping aggregators
really optimize their fleets and take much more orders per hour.
So, it's not just about being the cloud kitchen. It's about being the smart kitchen.
Exactly
We would replicate exactly what you would do
as a brand in any city we operate in.
You are the consumer, you go online, you place
a $100 order and that order comes to our kitchen, we produce the foods,
our staff are cooking the food using our smart kitchen operating software in our kitchens.
And then we will give you a brand royalty fee for the right to use your brand.
Food will be ready, aggregator comes, picks it up and delivers it to the customer. The
experience exactly replicates that of the brand.
2020 changing the world. A global pandemic, how has it impacted KITOPI?
This really accelerated adoption of online ordering,
and it also it really got a lot of the big brands to start accepting that change is coming.
For them to really
operate in a much more sustainable way, they actually have to operate differently.
While it was the global pandemic that put food aggregators like Zomato and Deliveroo on the map,
their popularity with consumers hasn't necessarily translated into market success.
Deliveroo launched an initial public offering in March 2021 with a $10.5 billion initial valuation.
They crashed out on the day by as much as 30%, giving London its worst IPO in history.
Where are you looking for growth?
We initially started off in Dubai, expanded across the Middle East. So that's a core market for us.
In Q4 this year we should be expanding to Southeast Asia.
So there's five cities over there that we are focused on expanding through this year.
And there's a lot of other clusters of cities
outside those two regions that we will expand to a later stage.
When could we see KITOPI go for an IPO?
I do think the way we see
capital raising, whether privately or publicly is a means to just completely satisfy our mission.
And we're looking at it as just fuel for further growth.
And it's not a particular end state and end goal for us.