Grapevine-based investment firm NewcrestImage has invested in a ghost kitchen startup called TiffinLabs which it says has the potential to permanently alter the hospitality industry in the United States.
The total investment amount was not disclosed, but NewcrestImage said it was now the Singapore-based food tech startup’s second largest shareholder.
TiffinLabs launched in 2019 just before the pandemic took hold and accelerated restaurants’ transition to delivery and digital apps. TiffinLabs has begun working with restaurant owners to create several ghost kitchen brands using their existing kitchens and workforce, and it generates its own revenue through revenue-sharing agreements with the companies it works with. associates.
Shadow kitchens, or “cloud kitchens,” are a booming segment of foodservice that is expected to become a $1 trillion industry worldwide by 2030. The term refers to a self-contained kitchen that performs delivery via delivery apps like Uber Eats, often operating under multiple restaurants. names. North Texas is full of new ghost kitchen concepts. Even Kroger recently announced that it will be rolling out its own shadow kitchens to stores in Texas by the end of January.
As part of its investment, NewcrestImage is now working with TiffinLabs on its expansion into the US market – and helping it connect with the hospitality industry in particular, said NewcrestImage managing partner Mital Patel. The Dallas Morning News.
Patel said he sees room for the hospitality industry to create shadow kitchens as it seeks new revenue streams after the 2020 downturn related to COVID-19. And he said TiffinLabs can start a ghost kitchen concept in just 30 days. The startup boasts that it can increase its overall profit by more than 30% without additional investment.
“Hotels have always struggled with [their] restaurants,” Patel said. “What was kind of a dead investment, we can start generating additional revenue now.”
In a hotel, ghost kitchens serve food that can be delivered to guests or residents of surrounding neighborhoods.
Patel said NewcrestImage saw success when it implemented TiffinLabs services in 27 of its hotel properties in 2021.
TiffinLabs provides the research, menu, and branding to help the kitchen concept achieve higher rankings on delivery apps like Uber Eats and Doordash in the restaurant-specific market.
“You’re giving a better solution to the hotel owner and even the consumer who now has three or four other options instead of just one,” he said.
TiffinLabs developed and launched a new food delivery brand each month in its first year of operation before expanding to the United States in 2021, where it partnered with pasta producer Barilla on a concept of Italian food delivery called Pasta Table. The startup has 200 kitchens in Southeast Asia and is expanding in the United States, Patel said. TiffinLabs plans to open 1,000 kitchens by the end of 2022.
NewcrestImage has traditionally focused its investments in the lodging and hospitality industry, but that strategy is changing, Patel said.
Looking ahead, NewcrestImage is diversifying its portfolio. It sold 27 of its hotels in 2021 to Austin-based Summit Hotel Properties in a deal worth $822 million. The investment company has kept two of its flagship hotels and is building more. But Patel said NewcrestImage is leaning more towards venture capital investments like its investment in TiffinLabs.
“We want to focus on areas of technology investment where we can also complement our other verticals – whether that’s in construction or hospitality operations,” Patel said.
NewcrestImage caused a stir in North Texas in 2013 with its dual-brand hotels that allow owners to cut costs by relying on shared staff to offer two guest experiences – a business model that emerged after financial difficulties from the 2008 recession. NewcrestImage executives, including Mital Patel, also bought the American bank of North Dallas in 2019. Patel said The news that American Bank opened a second branch in North Texas and increased its assets under management from $55 million to $240 million since the purchase.