Startups are fueling a ‘dark kitchen’ industry: Venture capitalists and startups are putting significant money and time into establishing so-called ‘dark kitchens,’ which only serve delivery customers, Tim Bradshaw writes in the FT. With the increasing demand for food delivery services resulting in the proliferation of companies like UberEats and Deliveroo, investors are now shifting their focus to look at how to make the supply side of the equation more efficient.

Different startups take very different approaches. Some, like Karma Kitchen, set up and hire out kitchens, partnering with other startups, like KitOpi, that actually make and deliver the food. Others, like Taster, identify areas of unmet demand and use algorithms to forecast sales, then rent kitchen space from somewhere like Karma Kitchen to prepare and deliver orders in lightning-fast time. Still others, including Deliveroo, have started preparing food in converted shipping containers in car parks, saving on space, manpower and overhead costs, and maximizing efficiency. The market potential seems huge, with investors like SoftBank having acquired a stake in ParkJockey, a Miami-based start-up that has been experimenting with car-park kitchens since 2016, and is currently valued at over USD 1 bn.

This trend seems made for the Egyptian market. Delivery culture here is huge, with Egypt being the first country in the region to set up a delivery website, Otlob, in 1999. Although there has been talk of the market being saturated, it continues to grow, with delivery platforms like Carriage and UberEats having recently entered the space. Add to this the growth of Qubix — already manufacturing the portable restaurants you see in Sahel every summer out of shipping containers — and the rapid growth of Egypt’s startup sector as a whole, all the key ingredients appear to be here for this idea to take off. Watch this space.