Business

This startup is reinventing dark kitchens

Dark kitchens are a mess. London-based Karma Kitchen, backed by more than £250m, is fixing a food-delivery staple 

“Dark kitchens” have a bad reputation. The off-site, industrial-scale cooking hubs fulfilling takeaway orders, supplying food trucks, or prepping prepackaged meals have become increasingly common during the pandemic – takeaway giant Deliveroo is set to double its number of dark kitchens. But these venues are infamous for low pay and poor conditions: many are cramped, windowless prefab buildings that freeze in winter and overheat in summer.

At first sight, you might not think the Wood Green site of dark kitchen startup Karma Kitchen was all that revolutionary, nestled deep in an industrial estate neighbouring an NHS test-and-trace centre and some railway tracks. But on the inside, it’s a different story; the spaces are bright and open, there are chic, coral-pink tiles and the walls are decorated with cheery vinyl wraps. Its 36 kitchen spaces are kitted out with high-end appliances and extractors and receive fortnightly visits from inspectors. Kitchen porters receive London living wage. Even the churn for companies using the facility is as low as three per cent.

“We’re kind of taking the piss out of dark kitchens,” explains Gini Newton. “When we started, people didn’t know what we were, so using the term dark kitchen, even if we don’t relate to it, helps people understand what we do.” Twenty-eight-year-old Gini founded Karma Kitchen in 2018 alongside her older sister Eccie as a space for food businesses of all sizes, and works with businesses from startups to established restaurant chains. “I’ve been a chef since I was 14 and I’ve worked in more sweaty basements with shouty men not seeing the light of day for 15 hours than you could possibly imagine,” Eccie, 30, says. “Karma Kitchen is a reflection on that time. The conditions are better than any kitchen I’ve worked in.”

The idea for Karma Kitchen came from their other business, corporate catering company Karma Cans, founded in 2014. Initially they produced their sustainable, healthy lunches from the kitchen of their Clerkenwell home – but when they wanted to scale the business, finding an affordable kitchen that suited their needs and was the right size was a struggle, causing them to move between three temporary spaces in one year. “We were spending all our money on capital expenditure and operations and it nearly destroyed us,” explains Gini. “Not because the product wasn’t good, but because we spent money in the wrong places. And we realised we weren’t alone.”

Since then, Karma Kitchen has become a leader in the dark kitchens space. Last summer, it raised £252m in Series A funding after initially aiming to get just £3m. Fronted by developer Vengrove Real Estate Management, the drive was made easier by the fact Karma Kitchen actually made a profit in its first year, something almost unheard of among startups.

Central to their success is efficiency. “Most food businesses have a specific time of day when they’re selling,” explains Eccie. A food truck, say, will want to work in the morning, while takeaways will need space during the nighttime rush, so Karma Kitchen has morning-evening shifts for renters. Sharing all the cleaners and porters and operating on a bigger scale only adds to that efficiency.

Another trait of a Karma Kitchen is variety. By running the full gamut of options, from workbenches in shared kitchens to private spaces, Karma Kitchen tailors itself to any size of business. In an industry where space is expensive to rent and kit out, often oversized and can take months to set up, Karma Kitchen offers a convenient alternative. Companies can go from first enquiries to getting space in just two weeks.

“It’s all about lowering the barriers to entry for businesses,” explains Eccie. “Letting you pay for the amount of space you need and make mistakes without losing too much.” That diversity means a site can be home to big names such as Sam’s Chicken and Byron, as well as small brands like Atcha that grew from a startup using a shared workspace to taking a private kitchen. Despite comparing itself to coworking behemoth WeWork, Karma Kitchen doesn’t want to be seen as a tech company: “We’re an infrastructure company,” says Gini.

Founding a startup as siblings had its challenges. “I threw a full can of chickpeas at her head one time,” admits Eccie. But once they had found their roles ( Gini heads up sales while Eccie handles operations and strategy) it has upsides. “One thing you get in a family is the honesty,” explains Gini. That candour allows them to cut out the formalities that burden many companies.

The pandemic has been a mixed blessing. “We lost our whole business at Karma Cans,” explains Gini. “But with Karma Kitchen, basically every restaurant in London was calling.” While Covid stripped away their street food, catering and corporate business, the sheer demand for takeaways allowed Karma Kitchen to thrive. Its Wood Green site, for example, hit 60 per cent occupancy before even opening.

With a new funding round on the horizon, Karma Kitchen has ten sites in the pipeline and plans to build 30 over the next two-and-a-half years, including in Paris and Amsterdam. The company is securing “more and more data” to guide their decisions about where to expand next, Eccie explains. “Food is at the heart of most cities,” says Gini. “It's the one industry that’s genuinely everywhere, so I don’t think we will struggle.”  

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This article was originally published by WIRED UK