Fast-growing & already profitable cloud real estate/kitchen-concept

21 April 2022

The takeaway and meal delivery market are expected to grow by an average of 12% per year in the coming years. The problem for restaurants, which have to meet this need, is that they are currently designed to eat the meals at the restaurant location. Opening a new restaurant location entails an average investment of €300K. In addition, the service area of a restaurant is limited, which means that their reach is bounded.

This scale-up solves this problem by providing ready-made kitchens for existing restaurants from which they can sell their products. Pick-up and delivery are available at the locations, which are located at a common location in the center of a densely populated area. Providing a pick-up option gives restaurant owners a much higher margin, because the pick-up option results in much lower fees than collaboration with parties such as Takeaway.com, Foodora and Deliveroo.

With this cloud-kitchen concept, the investment for the restaurants is not €300K, but only €20K. The operating costs are also substantially lower than with a regular restaurant. Their services area is also being expanded, allowing them to serve more customers.

The company has already opened 1 location, which is rented out for 100%. The tenants of the current location are very happy with the concept and did already break even at the new location within 2 months. The contracts for locations 2 and 3 have already been signed. There are already more registrations for these locations than there are kitchens available.

Placing several restaurant kitchens at 1 location will make much more efficient use of the property and the rental income for the owners of the property will increase sharply (400%). The value of the real estate increases on average by 300%.

Business model:

Renting out/reinventing restaurant real estate. Furthermore, the scale-up takes a commission on takeaway meals orders through their order kiosks/app. 

The scale-up realizes huge gains for every site they purchase, remodel, and secure demand for Real estate asset value.

In just 9 weeks, they increase the value of properties by 3times. This gain comes from the present value of their future rent cashflows (1.75Mn), and the property investment (0.25Mn). Earnings Properties can produce 4 times more net rental income with a model of the scale-up. Still, it is cheaper for restaurants to work with the scale-up instead of opening their own location.

Client type:

B2B (mainly) & B2C (with order kiosks)

Type of investor:

Angel investor, Venture Capitalist

USP’s:

  • Excellent, experienced team;
  • Already profitably with 1 location;
  • Multiple income streams (rent +/+ margin on takeaway meals);
  • Signed contracts for locations 2 to 5;
  • Can perform much faster than other competitors;
  • Value of the real estate is on average 300% above the price for which these properties are rented;
  • Strong price market.

Capital needed:

€ 5.000.000,- (Minimal ticket size is €100K)

Investment need:

The investment will be used as the equity part for the purchase of the real estate and for growth of the company (personnel +/+ development of platform).

Sector:

Real estate, Horeca, Overige

Business phase:

Series A

Number of founders:

1

Current emplyees:

5-25

Experience:

The company is led by an ambitious and excellent team that covers all aspects of the business operations. The CEO has experience as a manager at McKinsey. The rest of the team of 4 have held management positions at: UberEats, Deliveroo and as leading real estate agent.

CUrrent revenue:

€300.000,- annually

The first location is a breakout success. The scale-up is 100% occupied (7/7 kitchens) and tenants pay €3.5K per month. That means they are generating €294K in annual revenue with this location. They are also profitable! The Amsterdam location will generate €197K in earnings this year and the tenants are doing great, achieving break even sales in less than two months

Turnover (prediction): 

The scale-up is forecasting 20 sites in 24 months. That means they would generate €6Mn in revenue, €4Mn in profit, and €60Mn in Real Estate Value.

 

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