Swiggy pulls out of cloud kitchen business, sells vertical to Kitchens@ in share swap deal

Food delivery major Swiggy has sold off its cloud kitchen business to Kitchens@ as the SoftBank-backed company looks to dispose of nonviable business verticals. Cloud kitchen operator Kitchens@ acquired Swiggy's Access Kitchens business through a share swap deal wherein Swiggy becomes a stakeholder in Kitchens@. Swiggy has been redirecting its focus to better unit economics and profitability as it eyes public listing in coming years. The company sacked 380 employees and shut down Meat marketplace in January. Interestingly, Zomato had shut down its cloud-kitchen program Zomato Infrastructure Services (ZIS) in 2018 and instead, invested in Loyal Hospitality, the parent of Kitchens@, for an exclusive partnership. However, Zomato exited the company within two years. Swiggy ventured into the cloud kitchen business with the launch of Swiggy Access in 2O17. The program allowed restaurant partners to establish kitchen spaces in neighbourhoods where they do not currently operate, with the goal of offering more variety and shortening delivery times for consumers. “These "delivery-only" kitchen spaces align with Kitchens@'s own cloud kitchen model. By leveraging Swiggy's analysis of local demand and selection of high-performing partners, Kitchens@ can diversify food options and meet customers' needs in specific areas,” an official statement on the acquisition said.

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