Joint venture of Mail.ru Group and Sberbank close deal to buy into Local Kitchen

O2O, a joint venture of Mail.ru Group and Sberbank, has closed the deal on investing in Local Kitchen, a service offering express delivery from dark kitchens. O2O has received a 84.7% share of the project with the rest held by the service’s founders.

Local Kitchen has started integrating the Mail.ru Group and Sber ecosystems: its users will not need to waste time registering in the Local Kitchen app as they will soon be able to log in using VK Connect or Sber ID. The Local Kitchen mini app is already available to VK users.

Boris Dobrodeev, CEO (Russia) Mail.ru Group:

“We are glad to have Local Kitchen in our family. It is important today to move the benefits of online services to the offline market: services should be quick while factoring in individual clients’ tastes. Local Kitchen is consistent with these principles as it employs state-of-the-art technology and Big Data in its business.”

Lev Khasis, First Deputy Chairman of the Executive Board at Sberbank:

“Local Kitchen is a perfect example of a service which is quick to process clients’ queries, and even anticipates their preferences and expectations. We are happy to invest in a service which not only delivers good quality, but also forms new client habits.”

Today, the service operates 34 kitchens in Moscow, preparing food for local residents and handling over 20,000 orders per day. Thanks to the delivery by bike within a several-kilometer zone, customers get their breakfasts, lunches, and dinners as quickly as in half an hour, or even faster.

A smart system developed by Local Kitchen is employed for process management, accurately forecasting demand, and planning food supply. Currently, the menu offers more than 3,500 dishes, with about 100 of them rotating weekly. The system creates a menu for a day factoring in the season, upcoming holidays, and food preferred by local residents. After Local Kitchen is fully integrated into the Mail.ru Group and Sber ecosystems, the companies will be able to share technologies to benefit all O2O products.

Local Kitchen was founded in 2017. February 2019 saw the launch of Foodreactor, a kitchen factory, to scale up the service. In the second quarter of 2020, the number of orders prepared and delivered by Local Kitchen quadrupled compared to the same period in 2019. In 2020, Local Kitchen is set to reach almost all Moscow neighborhoods, and its revenue is expected to exceed 3 billion rubles.