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Tuesday 12 October 2021

Backers fuel Peckwater Brands to make light kitchens virtual

logoHere’s an interesting twist on the ‘dark kitchen’ food delivery model; the kitchens aren’t dark! They are in fact the kitchens of traditional restaurants that use spare capacity to create cuisines purely for home delivery under a ‘virtual’ brand.

This is the idea behind London-based virtual brand meal delivery startup Peckwater Brands. Peckwater works mainly with independent restaurants but also with brand owners looking to break into the food delivery market. Peckwater provides restaurants with what I would describe as a meal delivery ‘playbook’ (its platform) which covers the ‘soup to nuts’ (perhaps literally!) process from cuisine concept and branding, staff training, all the way through to meal delivery and payment.

Peckwater charges kitchen owners around 5% of gross sales (I assume only of the virtual brand meals) plus a one-off training fee. It’s not clear who pays for the technology (tablets and printers) but I suspect it’s the client, though Peckwater sets it all up.

Founded in 2019, Peckwater has just raised £3m in a seed funding round led by Fuel Ventures along with participation from Pembroke VCT. According to the PR, Peckwater has over 50 ‘partners’ (I assume they mean clients) in the UK and is ‘on track’ to reach £5m in sales this year. This is likely to be a gross number as if it were net revenues it would imply gross sales of some £100m i.e. about £2m gross sales per client, which sounds implausible to me.

Peckwater is not alone in the virtual brand meal delivery market. For example, London/Paris-based ‘digital food court’ Taster originally worked entirely from dark kitchens, but has since expanded to ‘light’ kitchens too. Taster operates in six cities across the UK, France and Spain, with more in plan (see Backers dish up more dosh for Taster’s dark – and light – kitchens).

As I said before, I really like the idea of virtual food brands in principle. There’s room in the market for more than one virtual brand platform, but the cuisines and brands will require constant reinvention. However, in Peckwater’s case, I can’t see how a 5% gross margin is going to make ends meet.

Posted by: Anthony Miller at 09:16

Tags: funding   startup  

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