Virtual Food Hall Startup Byte Kitchen Raises $6M Round

The cloud kitchen space, which we cover from time to time here, has gone through a few things lately. The industry hit its stride before and especially during the pandemic. Yet recently it looked like maybe the online food business had expanded beyond what consumer demand could support. 

Last month we wrote about layoffs and other signs of retrenchment in the cloud kitchen/virtual restaurant space. This signaled that perhaps the momentum behind the industry merging fine dining, technology, and delivery culture was cooling. 

For example, Nextbite, the virtual restaurant platform that has relied heavily on celebrities to build its brand, cleaned house and re-evaluated its business. And ghost kitchen/food truck platform Reef Technology was reducing its headcount by 5 percent.

Then came a counterfactual to this narrative with Wonder. The Marc Lore-led mobile ghost kitchen business raised an Adam Neumann-worthy $350 million. Wonder is quite literally a business that puts mini ghost kitchens in vans. And then they prep food while parked outside the customer’s home. 

Wonder’s raise suggested the virtual food business still has some wind at its back. Or it was just an example of a high-profile entrepreneur having the juice to raise serious money for an idea for which others couldn’t get a meeting. See the Twitter storm over A16Z’s investment in Adam Neumann’s Flow yesterday for more context to this debate.

Helping Local Restaurants Grow Nationally

Enter Byte Kitchen, a San Mateo, CA, startup that today announced a comparatively modest $6 million funding round to expand its virtual food hall business. Yet it’s another signal that perhaps foodech is still attractive to investors.

What’s a virtual food hall, you might ask? It’s essentially like a food court, but online.

The big idea behind Byte Kitchen is that it allows local, independent brick-and-mortar restaurants to expand nationally through Noshery, which is Byte Kitchen’s virtual food hall brand. Local brands outsource pick up and delivery only food production and distribution to Byte Kitchen. This theoretically allows them to scale nationally as Byte Kitchen expands, as long as they trust a partner like Byte Kitchen to protect their brands.

Each Noshery food hall can handle about eight brands. And consumers can mix and match items from different brands in a single order. The Noshery locations are not dine-in, but do offer the choice of pick up or delivery. So they must be located in commercial areas.

Plans to Expand

The company launched its first Noshery kitchen in San Mateo last year. The plan is to use the new funding to expand locations, and invest in tech and people. Byte plans to expand first in California and then nationally. The company already has plans to open a new Noshery local in San Carlos, CA. 

“Independent restaurants are the heart of local communities, and we started Byte Kitchen to amplify their reach across the nation,” said Byte Kitchen Co-founder of CEO Divyang Arora.

“However, in a market saturated with ghost kitchens and virtual brands, we believe product quality is what will win in the long run. At Byte Kitchen, we’re committed to upholding the trust of our restaurant partners, from faithfully executing their recipes to maintaining strong relationships with customers.”

The $6 million round is led by Crosslink Capital, Emergent Ventures, and entrepreneur Kevin Mahaffey (Lookout, StorkClub). Other chipping in include Correlation Ventures, Wndrco, Soma Capital, and Y Combinator. Angel investors also participated. Among them are Shawn Tsao (co-founder of Caviar), Bruce Dean (founder of Black Bear Diner), and Edna Morris (former President of Red Lobster). 

Share Article...

Follow Us...

Stay ahead of the curve and get the latest on Local straight to your inbox.

By submitting this form, you agree to receive communications from Localogy. You can unsubscribe at any time.

Related Resources

Understanding SNBL vs BNPL

This week I had the privilege of participating in an event about small business technology in beautiful Cape Town, South Africa.  One of the many


SVB Fallout: A Conversation with Progress Partners

We discussed SVB with Progress Partners’ David Arslanian this week. Prior to the episode dropping on Monday, we also got the chance to gather insights from Arslanian’s colleagues on the SVB fallout in the marketing world.