Saltalk, a virtual cooking and e-commerce platform, closed an $8 million Series A funding to continue to grow its authentic cuisine, prepared by both restaurant chefs and home cooks, as well as food supply resources and logistics.
Founder and CEO Fred Ming, previously a software architect, came up with the idea for Saltalk a few years after leaving China. He and his wife went to dinner at a restaurant that served a meal reminiscent of Ming’s wife’s house.
“My wife told me that the meal made her homesick, which inspired me to fix it by creating a platform for chefs from everywhere to come and cook for those who are not not at home,” he told TechCrunch.
From that plan became Saltalk, which he launched in 2017. The company’s name is a mix of “salt,” an important spice for cooking, and “speak,” which he says “is essential to our lives”.
Four years later, the company’s 8,000 square foot virtual kitchen is producing orders on Saltalk’s website, which offers more than 200 dishes.
Virtual kitchens don’t have a dining room or associated costs, which usually means they generate higher profit margins. The industry is all the rage right now and goes by other names, like dark kitchen, cloud kitchen, or ghost kitchen, and involves having a space in a central location where chefs concoct their culinary creations and deliver.
The global virtual kitchen market was valued at just over $43 billion in 2019 and is expected to reach $71.4 billion by 2030, according to figures from Statista. This compares to a trillion dollar food industry.
As the food delivery industry has grown over the past 2 years, these types of cuisines have also gained attention as we eat more at home during the pandemic. This not only provided restaurants with a way to have online ordering capabilities without changing their own kitchens, but in some ways it also allowed them to experiment with cooking some of their menu items in small batches. more popular. Additionally, when restaurants laid off staff, it provided an outlet for chefs to supplement their income while creating their own menus.
Investors weren’t far behind, pumping some $545 million in venture capital funding into US-based virtual kitchens alone in 2020, according to Food On Demand. TechCrunch has been on board, and recently reported on The Food Lab in Egypt and Manila-based MadEats.
At Saltalk in the South Bay, 25 chefs are currently working in one kitchen. Here’s how it works: There are two routes – one is the cooking platform for chefs where they can start their own business for around $30,000. Saltalk charges a bundle of fees for space, licenses, and processing, and it takes a 25% commission.
Ming says that many chefs are able to break even after working with Saltalk for 3 months. The company gives them everything they need to build the business, including order management, inventory, and bulk buying capabilities.
“More people spend time on work and social life, and they don’t have time to cook,” Ming said. “At the same time, current catering is based on traditional restaurants, which often have high 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 success of the chef.
The other side is the e-commerce platform where the company acts as a one-stop-shop for many different types of cuisine, from Japanese to Indian to burgers and pizza. Customers can order up to 2 weeks in advance and delivery takes 15 minutes, Ming said.
“We have our own route plan system so that our drivers can make four stops at a time, which saves on logistics costs, which allows us not to charge delivery costs to customers”, he added.
About 100 businesses use the service, which enables group meal pre-ordering and on-time delivery through proprietary route-planning technology, Ming said. Customers pay no shipping or service charges, or tip.
Ming said the company’s technology underwent a strategic upgrade about 8 months ago, where it went from a simple business-to-business operation to adding consumers, and since then Saltalk has grown more than fivefold. .
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 Peninsula to support additional brands. Ming expects 15 such kitchens to be spread across Silicon Valley by the end of 2024.
In addition to the new kitchens, Ming believes the business will grow by around $2 million per month over the next year, giving Saltalk the opportunity to double its workforce.
“In the next two or three years, we plan to expand throughout California,” Ming said.