Local Kitchens has raised $40 million to expand its takeout-focused food halls to Southern California. The Series B round was led by existing investor General Catalyst, a venture capital firm.
Local Kitchens was founded in 2020 and currently operates 12 locations in the Bay Area and Sacramento. Each unit houses about eight local or regional restaurant chains covering a variety of cuisine types, from chicken sandwiches to boba and Mediterranean, all prepared in a single kitchen. Customers can mix and match from different menus for delivery and pickup or on-premise dining.
The company has positioned itself as an enlightened take on ghost kitchens, the multi-brand, delivery-only restaurants that operate out of view of customers, and have largely failed post-pandemic.
Local Kitchens tends to be located on main streets near where people live, and most customers pick up their food themselves. But they can also order on-site and eat in the dining room. In a blog post, co-founder and CEO Jon Goldsmith wrote that this format helps Local Kitchens “preserve the magic of food as a means to bring people together.”
On the back end, though, Local Kitchens is as high-tech as any ghost kitchen. It built most of its system from scratch, including the POS, KDS and a program called Dynamic Firing, which coordinates the cooking process so items from different brands are ready at the same time.
The technology helps Local Kitchens operate more efficiently, allowing it to reinvest in the business, Goldsmith wrote. Putting multiple brands under one roof, meanwhile, helps drive higher sales volumes. Local Kitchens is currently profitable at the unit level, the CEO wrote.
The company is also hoping to provide a growth platform for the brands it partners with. These include San Francisco-based Proposition Chicken, which has two stand-alone units and nine with Local Kitchens, and the 17-unit Boba Guys, which is in all Local Kitchens outlets. There are also burgers from The Melt, Mexican from Nopalito Taqueria and dessert from Humphrey Slocombe and Milk Bar.
Each location offers most of the same brands, with some variation depending on the market.
Originally dubbed a “micro food hall,” Local Kitchens is now going with the even simpler label of “multi-brand restaurant.” And Goldsmith is predicting big things from it.
“We believe this type of model has the potential for rapid growth and will be as disruptive to the restaurant industry as fast casual led by Chipotle in the 1990s and before it fast food drive-thru led by McDonalds in the 1960s,” he wrote.
Local Kitchens’ latest funding round follows a $25 million Series A in 2021. It has grown fourfold since then, a representative said in an email.
On the other side of the country, a similar strategy has been adopted by Wonder, the delivery-focused food hall startup created by billionaire entrepreneur Marc Lore. Wonder recently raised $700 million and plans to have 90 locations by the end of next year.
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