Miami-based Reef Technology has raised $700 million in a private equity round led by Mubadala Capital, an investment arm of Mubadala Investment Company, a sovereign wealth fund based in Abu Dhabi. SoftBank Vision Fund, which is managed by Oaktree Capital Management, UBS Asset Management and Target Global also participated.
Reef doesn’t fit neatly into any existing category, straddling as it does several new and existing areas of operation. In a nutshell, the company provides all of the hardware, software, and management services that are needed in order to transform a parking lot into a neighborhood delivery hub for local restaurant businesses. Reef describes itself as “the ecosystem that connects the world to your block.”
Today the company utilizes a network of 4,500-plus parking lot locations to create a “proximity-as-a-service platform” for restaurants and other retail businesses (and even, more recently, COVID-19 testing spots) large and small. By eliminating the usual brick and mortar overhead and staffing costs, Reef Kitchens offers a way for restaurant owners and operators to launch or scale their businesses with a low-cost, low-risk turnkey solution. During the pandemic, the demand for affordable restaurant operational and delivery infrastructures has grown by orders of magnitude.
In additional to securing the massive funding round, Reef has entered into a partnership with Oaktree Capital to form a $300 million venture called the Neighborhood Property Group. The organization is dedicated to acquiring strategic real estate assets that can serve to strengthen and expand Reef’s foothold in local communities and neighborhood infrastructures for its on-demand delivery services.
Reef launched Reef Kitchens in 2018 as a company provides delivery-only ghost kitchens for local food entrepreneurs. Now the company operates kitchen trailers on unused parking lot spaces, in the process enabling parking lot landlords to monetize unused parking lot real estate. In addition to selling food from partner brands, the company sells its own menu items on third-party delivery platforms.
Reef runs about 100 Neighborhood Kitchens across more than 20 North American markets. Miami’s Della Bowls, for example, is open in 18 Reef Kitchens across the country.
Of course, Reef is hardly the only ghost kitchen company in town. The competitive landscape is becoming increasingly crowded with major players. Among them is CloudKitchens, which was founded by former Uber CEO Travis Kalanick. Just last month, restaurant technology solution provider Ordermark, which operates Nextbite, one of the earliest and fastest-growing pioneers in the virtual restaurant space, closed a $120 million Series C funding round. That investment was also led by Softbank Vision Fund.