Microsoft backs Uber cofounder Travis Kalanick’s CloudKitchens: report

The investment was part of CloudKitchens’s $850 million funding round that closed in November 2021. Since receiving the cash injection, CloudKitchens has been able to supercharge its growth globally, the report said, and it now has more than 4,000 employees across the US, Latin America, the UK and the Middle East.

CloudKitchens buys or leases warehousing space, converting these premises into dark kitchens — units that can be rented by restaurant businesses to cook food to be sold via delivery apps such as DoorDash and UberEats.

Kalanick, who was ousted from Uber in June 2017 after a series of scandals, took over the real-estate company City Storage Systems, which runs CloudKitchens, in 2019.

Microsoft invested around $100 million in Uber in 2015, when the ride-hailing service was valued at around $50 billion. But the software company’s decision to once again back Kalanick, whose exit from Uber was prompted by a series of ethical scandals and management failings, appears to set Microsoft apart from other prominent Silicon Valley investors who have previously backed the controversial entrepreneur.

According to the Financial Times report, CloudKitchens earlier suffered from many of the same cultural issues once found at Uber, and was experiencing high attrition as a result. One senior figure, who had also previously worked at Uber, described CloudKitchens as “the most toxic place I’ve ever seen or experienced”.

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The rationale behind Microsoft’s interest in CloudKitchens – given the risk of associating with a figure as controversial as Kalanick – is unclear. Microsoft’s investment could be part of a commercial agreement involving its Azure cloud computing business, a common arrangement in the industry.