⏪ Part 1

✋ Model: Pivoting on the precipice

For a time, Kitopi’s original B2B model worked. But then the cracks began to show.

The economics of operating as a middle layer — squeezed between restaurants and delivery aggregators — grew increasingly fragile. Driving more revenue per square foot turned out to be less scalable than originally hoped.

While physical landlords took a manageable 8% of revenue, the digital landlords of the modern restaurant landscape — platforms like Deliveroo and Talabat — claimed far larger shares, often between 25% and 35%.

A recipe for shrinking margins, if you’ll pardon the pun.

All the while, Kitopi did most of the heavy lifting, running kitchens for over 200 brands and managing more than 10,000 ingredients across multiple markets.

Kitopi owned the infrastructure and managed operations, yet never had a direct relationship with the customer.

The model was broken. Consumers had no clue Kitopi powered their favourite brands.

Aggregators controlled customer relationships, data, and pricing, leaving Kitopi in the shadows.

It was a precarious position, akin to Facebook’s reliance on Apple’s App Store. Just as Apple served as a gatekeeper for Facebook’s user access, delivery platforms held the keys for Kitopi’s growth. The company needed to rethink its role in the value chain.

The question wasn’t just how Kitopi could grow — it was how it could truly own that growth.

Fixing a broken model

The answer? Own the brands outright instead of merely licensing and managing them.

This shift from B2B to B2C was profound.

Ownership delivered full control over brand identity, direct customer relationships, and operational efficiency. It also tackled the complexity of scaling across markets by consolidating operations around fewer, stronger brands.

Kitopi trimmed its roster of 200 partners to focus on 100 owned brands, reshaping itself into a vertically integrated stack.

Executing a pivot of this magnitude wasn’t cheap. Kitopi needed to raise vast amounts of capital (thanks, SoftBank) to embark on an acquisition spree and overhaul its operations.

By 2021, it had secured the funding to launch what it called its “2.0 journey.”

The strategy has two main strands:

1. Acquiring Brands: 

Kitopi built a portfolio of local, regional, and international names.

These include Cloud Restaurants (Go! Greek, Go! Healthy), Leap Nation (Tawook Nation, Luca), Right Bite, Under500, and Ichiban.

Perhaps most notably, it acquired AWJ — the group behind Operation Falafel, Catch 22, and Awani — which, with over 32 outlets across cities like New York and London, added significant scale, credibility, and a loyal customer base.

👋 Message from the team

Thanks for reading this week’s edition!

If you’re enjoying the newsletter, don’t forget to share it with a friend!

Have a question or any feedback? Just hit reply, or provide a rating below - we want to hear from you!!

Was this forwarded to you? Sign up here.