Saltalk turns up the heat on its virtual kitchen following new $8M cash infusion

Saltalk, a virtual kitchen and e-commerce platform, closed on $8 million of Series A financing to continue developing its one-two punch of authentic cuisine, made by both restaurant chefs and home cooks, and food supply resources and logistics.

Founder and CEO Fred Ming, previously a software architect, got the idea for Saltalk a few years after relocating from China. He and his wife went out to dinner at a restaurant that served a meal that reminded Ming’s wife of home.

“My wife told me the meal made her homesick, which gave me an idea to cure it by building a platform that gets chefs from everywhere to come and cook for those away from home,” he told TechCrunch.

From that plan became Saltalk, which he started in 2017. The company’s name is a mixture of “salt,” an important spice for cooking, and “talk,” which he said “is essential for our lives.”

Four years later, the company’s 8,000-square-foot virtual kitchen is churning out orders from Saltalk’s website, which features over 200 dishes.

Virtual kitchens don’t have dine-in facilities or the costs associated, which typically means they yield higher profit margins. The industry is hot right now and goes by other names, like dark kitchen, cloud kitchen or ghost kitchen, and involves having space in a central location where chefs whip up their culinary creations and have them delivered.

The global virtual kitchen market was valued at just over $43 billion in 2019 and is poised to grow to $71.4 billion by 2030, according to Statista figures. That compares to a trillion-dollar food industry.

As the food delivery industry grew over the past 2 years, these types of kitchens also gained attention as we ate more from home during the pandemic. It not only provided restaurants a way to have online ordering capabilities without changing their own kitchens, but in some respects it also enabled them to experiment with small-batch cooking of some of their more popular menu items. In addition, when restaurants were laying off staff, it provided an outlet for chefs to supplement their income while creating their own menus.

Investors were not far behind, pumping some $545 million of venture-backed funding into just the U.S.-based virtual kitchens in 2020, according to Food On Demand. TechCrunch has been along for the ride, most recently reporting on The Food Lab in Egypt and Manila-based MadEats.

Saltalk virtual restaurant food

Saltalk’s virtual kitchen features daily specials from a number of its restaurant brands. Image Credits: Saltalk

Over at Saltalk in the South Bay, 25 chefs are currently working out of a kitchen. Here’s how it works: There are two paths — one is the kitchen platform for chefs where they can start their own business for about $30,000. Saltalk does charge a set of fees for the space, licensing and processing, and it takes a 25% commission.

Ming says many of the chefs are able to “break even” after working with Saltalk for 3 months. The company gives them everything they need to set up the company, including order management, inventory and wholesale purchase capabilities.

“More people are spending time on work and social lives, and they don’t have time to cook,” Ming said. “At the same time, current food service is based on traditional restaurants, which often have expensive prices for food. We needed a new infrastructure to improve that, and Saltalk’s service is like Shopify, where our success is based on the chef’s success.”

The other side is the e-commerce platform where the company acts as a one-stop shop for lots of different types of cuisine, from Japanese to Indian to burgers and pizza. Customers can order up to 2 weeks ahead, and delivery comes in 15 minutes, Ming said.

“We have our own routing plan system so our drivers can do four stops at one time, saving on logistics costs, which is how we are able to not charge delivery fees from customers,” he added.

Approximately 100 companies use the service, which enables pre-ordering of group meals and on-time delivery through proprietary route planning technology, Ming said. Customers don’t pay any shipping or service fees, nor do they have to tip.

Ming said the company’s technology went through a strategic upgrade about 8 months ago, where it shifted from being just a business-to-business operation to adding consumers, and since then, Saltalk achieved over five-fold growth.

The Series A funding, led by Foothill Ventures, comes at a time when the company is accelerating its growth. Including the new investment, the company has raised $10 million since 2017.

Saltalk is planning two new 15,000-square-foot virtual kitchens in the East Bay and the Peninsula to support additional brands. Ming expects 15 of these kitchens will be dotted across Silicon Valley by the end of 2024.

In addition to the new kitchens, Ming believes the company will grow approximately $2 million per month over the next year, giving Saltalk an opportunity to double its workforce.

“In the coming two or three years, we plan to expand all over California,” Ming said.

This article was originally published on TechCrunch.com. Read More on their website.

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