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Cloud kitchen operator Sweetheart Kitchen has successfully secured €15 million (US$17.7 million) in a Series C funding round backed by strategic investors, led by the company’s founder and CEO Peter Schatzberg.
As a delivery-only multi-brand virtual kitchen, Schatzberg notes that the Dubai-based company is keen to invest their funding into supply chain technology, food design and hiring talent, as they had previously done, and which they plan to continue to do so. “Scaling units is certainly one important objective for us, but we are also investing in streamlining our processes and systems to achieve profitability.”
As a company that is only 15 months old, it’s noteworthy to point out its impressive milestones. The startup (which, according to a Wamda report, is backed by Germany’s Delivery Hero) has previously raised €21 million ($24.8 million) in a previous round. Thus, as of date, the startup has raised a total of $43 million. The brand boasts a portfolio of 30 brands, such as Wingo, Avocado Bravo and Affordabowls, among others.
That’s not to say that cloud kitchen startup hasn’t had their fair share of hurdles during the pandemic. Schatzberg comments, “Almost overnight, we pivoted from scaling volume and units, to demonstrating profitability through aggressive cost-cutting measures that would ordinarily take place in a mature enterprise.” They had to close live units in Kuwait, as well as make reductions, and lose cash flow as they were waiting to open a number of completed units, but was vacant due to citywide lockdowns. He adds, “Any incremental revenue we might have received as a function of the pandemic was more than offset by the various costs and challenges that the pandemic
Dubai-based cloud kitchen company Sweetheart Kitchen said it plans to use funds from its recently concluded Series C round to expand its brands and reach in the region in addition to investing in technology and talent.
The 15-month old company had raised €15 million ($17.7 million) in Series C funding backed by “strategic investors” after raising a total of €21 million ($25 million) in previous Series A and B rounds.
Sweetheart Kitchen said in a statement that it plans to use the funds from the new round to launch five new brands, in addition to the 30 in its stable.
It said the company is targeting to have 12 units live in the UAE by the first quarter of 2021 and enter Saudi Arabia in the second half of 2021.
The funds will also be used to relaunch its Kuwait operations that were impacted by the pandemic lockdowns in the Gulf state.
“We plan on re-opening in January with seven kitchens and on covering over 75 percent of Kuwait by the end of second quarter of 2021 with our new brands,” the statement said, quoting marketing head Adib Samara.
CEO Peter Schatzberg said the company would continue to invest in supply chain technology, food design and hiring talent into 2021.
In April, Schatzberg had told Zawya that the company was targeting 12-15 units in the UAE and 10-12 in Kuwait in 2020.
The global cloud kitchen market size was valued at $43.1 billion in 2019 and is estimated to reach $71.4 billion by 2027 with a CAGR of 12 percent from 2021 to 2027, according to Allied Market Research.