Dubai cloud kitchen platform Kitopi has sacked 93 of its head office staff, people familiar with the matter told Arabian Business, as the tech industry continues to slump.
“We’ve made the decision to streamline, simplify and focus our efforts across the business to be more effective and efficient. As a result, we have reduced our global workforce by 1.86 percent,” a Kitopi spokesperson told Arabian Business.
Kitopi’s entire workforce numbers over 5,000, but the job cuts represent a 10 percent cut of head office staff.
“We are grateful to our colleagues who have helped get us to where we are today and we will be providing as much support as we can,” the spokesperson added.
Kitopi, which stands for Kitchen Utopia, was founded by Mohamad Ballout, Saman Darkan, Bader Ataya and Andy Andreas to help food brands scale and expand across borders with minimal capital expenditures and operating expenses by taking care of the entire operations process- from supply chain and staff training to food preparation, delivery, and customer experience.
In July 2021, Kitopi announced a $415 million Series C funding round, led by technology-focused investment fund, Softbank Group Corp’s Vision Fund 2. This investment, which marked the fund’s first investment in a UAE-headquartered company, gave Kitopi its ‘Unicorn’ status, a term referencing a startup with a valuation of over $1 billion.
Founded in 2018, the tech unicorn partners with over 200 brands in the food and beverage industry, across five countries, operating 200-plus kitchens.
In January this year, Kitopi launched operations in Bahrain and Qatar, raising its market share to five countries across the GCC. Further expansion of its kitchens to Singapore and Malaysia in the books for the second half of 2022.
Kitopi follows the many MENA startup tech companies such as Swvl, crypto-backed Rain, and Turkish startup Getir among others, that sacked employees this year as they were forced to focus on profits instead of expansion plans after years of strong growth.
The dark kitchen industry in the UAE in particular has seen excellent growth as the Covid-19 pandemic kept people at home and ordering food online. The layoffs at Kitopi, could be representative of a changing dynamic in the dark kitchen sector as firms reorientate to the new normal.
Layoffs at tech startups are spiking around the world, even though the fundraising landscape is seeing an abundance of venture capital money.
According to a data report by Magnitt, the total funding secured by startups in the Middle East and North Africa (MENA) more than doubled to about $864 million during the first quarter of 2022. The number of deals rose by 16 percent.
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