Losses spiral at Travis Kalanick’s British takeaway kitchen start-up

Credit: ROBERT GALBRAITH/Reuters

Uber founder Travis Kalanick’s British “dark kitchens” operator FoodStars reported a five-fold increase in losses last year as it ramped up expansion plans, opening a flurry of new sites.

FoodStars, which was bought by Mr Kalanick in 2018, operates kitchen space that can be rented by restaurants to allow them to offer takeaways. It has locations in London, Birmingham, Manchester and Leeds.

Filings released by the company revealed it had incurred losses of almost £2m for 2019, compared to just £420,000 for the prior period, which ran from April 1 2018 to December 31, 2018. 

This comes despite revenues increasing slightly to £175,000 from £129,000. The company said administrative expenses had spiked between the two periods.

FoodStars has been quietly expanding operations over the past few years, broadening its reach across the UK and, in London, now operates 12 locations.

The pace of growth in the UK business was said to be a topic of concern for Mr Kalanick, with sources saying earlier this year he had been pushing for his larger CloudKitchens organisation, which owns FoodStars, to be growing fast in every region. 

Murray McGowan, the former managing director of Wagamama owner Restaurant Group, had headed up the business for a brief period of 10 months, but stepped down last February. 

FoodStars did not respond to requests for comment.

The company’s heavy spending came ahead of a boom in demand during the pandemic, with millions having turned to takeaways during lockdowns.

Deliveroo, for example, swung to a profit this year after more families ordered meals to their homes.

It said the pandemic had meant more people were ordering larger meals, rather than single-person orders. 

Deliveroo operates its own "dark kitchens" under the "Editions" brand, and last month said it would be more than doubling the number of Editions sites it operates worldwide over the course of 2021.