 Hello, everyone. Hello, Echie. Hello, Jeannie. I hate when that happens. You go out to raise 3 million and you accidentally raise almost 300 million. I hate when that happens. But you guys have had an amazing journey already, even this early on, and the rest of the journey is going to be equally exciting. So I'm excited to talk about that journey together with you. Maybe just in terms of introductions, because you're two sisters. Yeah. We tend to talk over each other too, so we're going to be really careful. I'm going to slow it down so our voices sound similar enough that it would be confusing. Exactly. Just say which one you are of the two sisters and what you do at the company for starters, and then we'll dive into the good bits. Cool. So I'm Jeannie, and I run all the revenue and sales for both, well, karmic hands. I started that, and now karmic kitchen. I'm Echie. I'm the CEO, and I run finance and strategy and some operations and development for karmic kitchen and karmic hands. Yeah. Great. Jeannie, you already mentioned the name karmic hands, so that brings us to the start of this journey, and we'll start at the beginning as we have to. Where did this all start for you, this journey? What is karmic hands in the first place? So karmic hands is a corporate catering business, and we started it when I was 21, and Echie was 23 back eight years ago now. It now does a thousand meals a day for different tech companies across London. But at the beginning, one of our biggest challenges was finding kitchen space. We moved three times in one year, we took a restaurant kitchen, we then moved into a shipping container that we kitted out ourselves, basically zero capital, and then we finally took a warehouse in Hackney, and we realised we had to sign a five-year lease, and it was super expensive. So we ended up subletting it to other people and food, and we just couldn't believe that like there was nothing in tech. If you need a space, you can walk into a co-working space, and you've got everything sorted, but in food, you've got to build your own, and it's very capital intensive. So after growing karmic hands to an amazing team it is today, Echie and I came up with the idea for karmic kitchen as the solution to what we needed at the time. And that's where karmic kitchen happened. Yeah, and we got into a lot more details. But Echie, you're trained as a chef. Was it your dream to work in the corporate catering business? I think I may have fallen into it, but I basically loved working in the kitchen. I loved the experience of being on my feet every day, doing something really practical. I also delivered all of the food from karmic kitchen as well by bike. I thought I had the best job in the world. I was like building out our first kitchen space, cycling around lunches, cooking, and then when it came to karmic kitchen, I just realised that we both realised that if we didn't do this, somebody else would, and we should really be the people to provide kitchen space, the kind of kitchen space that we needed from our perspective to all of these other businesses. And that's really the central thesis of karmic kitchen. Can we provide space for thousands and thousands of businesses? And what else can we do within that space? How can we build a good ecosystem for these businesses to grow in? I don't want to move under the assumption that everybody in the audience knows about dark kitchens or virtual kitchens or ghost kitchens, whatever you want to call it. So maybe, can you briefly explain the concept behind it? What is a ghost kitchen? Basically, we take big warehouses around the edges of towns. I would say in the doughnut ring around the city. Not the very city centre, not the very outskirts, where there's good connections. There's a mixture of residential buildings and also office and commercial interests. And we take a big warehouse of about 20,000 square foot. So I think that's 200 square metres. The conversion is on stage? The conversion is on stage, yeah. And we fit out kitchen units in it of all different sizes. And what's unique about karmic kitchen is that we serve the whole food market from really small start-ups on shared work benches where you can literally rent a bench for one hour a week, if you need to, all the way through to massive companies like Unilever. And we provide space at all different levels on all different times, and we put them all together in these big fitted spaces and let them just do their thing. And we don't touch the food, but we do look after lots of the low-level operations, the cleaning, the maintenance, all of that stuff. And our job is to build infrastructure, both physical and technical infrastructure for these businesses to help them run smoothly. Exactly. You build and provide infrastructure. You're selling the shovels to all the ghost kitchen start-ups that are getting a lot of recognition. You're doing it very well. But of course, you still have your corporate catering business, which is so amazing that you kept karmicans going as well. What's the reasoning behind that? Karmicans are a baby, and we just think that we've had a tough year with COVID. We're doing our best here, and then we went to zero revenue in a week, and it's just such a resilient business. We've got a contract with the NHS, which carried us through. We're doing a thousand meals a day with different hospitals. Although Ekki and I aren't really that involved in the day-to-day, we've built such an amazing team around us. I mean, the team at Karmicans have been with us for six years. They've watched us at the beginning of our journey. I was 21. I didn't know how to manage a team. I was running sales, and I had no sales background, and they stuck it out with us. It was our training ground, team-wise, culture-wise. When you look at it, when you build a revenue-driven business from the ground up, and you really have to make those hard choices, the people that join you for that kind of journey, which is a brutal journey, ups and downs. We've talked a lot internally about how that can look. When you get through to that at the end, you have some people around you, and you have some things there that you just can't make that happen in a second, no matter how much cash you have. It takes time to build that. I mean, we literally, you're right, our revenue for Karmicans was wiped out. We used to sit in our sales meetings before the pandemic at Karmicans, and we'd be like, everybody would just be giving each other a pat on the back and a round of applause every month. We'd be like, we grew 30% this month. Corporate catering is so competitive. Yeah, this competitive market, and then when the pandemic hit, we were like, oh no, we're not growing at 30% every month anymore. To be credit to our team, they literally pulled everything together with our help. When you've brought your business or two businesses through a pandemic and granted Karmic kitchen, that's a good market for it in COVID, but I can't let that go. It's a foundation of who we are as people, and what it's meant for us to build that right from nothing. That's also priceless education, because you can feel the pain points of your customers first hand, so you know what they go through, of course. I understand why you keep it going, for sure. Let's talk about that journey. Actually, the topic of this session was your fund raise last year, which was coming from a journalist in the European text phase, one of these stories that you were like, this would have never happened even three, four years ago, but now apparently that can happen, so can you walk us through what actually happened when you went to raise your series A round? Yeah, should I start? Yeah. So, we are not quick to raise money, and each round has taken us a lot of time to do at least a year, and even our seed round, which was very small, and we were just hitting our heads against the same wall for almost a year, nine months. We were trying to raise capital from VCs to buy buildings and put fit out, you know, basically spend. We'd buy a building for four million pounds, and we'd fit it out for two and a half million pounds, and we were knocking on VCs doors and going, why won't you give us money for that? And they were like, yeah, we're kind of more interested. Are you a tech company? Is there any tech element to it? Like, this is tech? Yeah, this is tech. You know, on top, we build the technical infrastructure too, but before you build the technical infrastructure, you need the physical infrastructure. That's where all of our clients are centered. So, after a long time and probably a lot of rejection, how much rejection do you think? A lot of, yeah, this is a great idea, but it's just not for us. Maybe more than 70 of those, basically. We got pinged by a big PE company in the November, and they were like, hey, have you thought about a product structure? We're a private equity company. Have you heard of private equity? No, we haven't heard of private equity. No, we haven't heard of a product structure. We did a ton of reading and research about it, and we just realized that we're an asset heavy business, and the vast majority of our costs go into our assets, and then they start making money for us when we turn an operating profit on those units within three to six months of them opening. So, completely different return profile to what a VC is looking for. It fit really well into more real estate-focused funds, and within two months, we had another three offers on the table for this product structure, and yeah, we were closed. There was a bump in the road at the beginning of the pandemic when we had a deal fall apart, but we picked it back up and, again, had a couple more offers, and the deal closed up by just a few months after we had discovered this midlock way of doing things, and it just shows you, like, you can spend all of your time just focused on the wrong thing because you don't know what's out there, and I think because we're not from startup background and with, you know, comic-ass is quite, you know, it's a revenue-driven business, you don't know like how money, the structure of money and the structure of the startup world works. I love that you bring this up because that was going to be my next point because you don't come from startup world. You didn't even know venture capital and private equity was, you can say, when you started raising. I find that so amazing because you're two young women coming from like a corporate catering business entering this world, but you also feel like a few years ago that wouldn't have happened. Like, I don't know how much you know about like private equity and venture capital world right now, but there is a lot of money flowing in and it needs to be invested somewhere. So, do you think you could have pulled this off even three, four years ago? No, I don't think we could have. I mean, really, every single year we're learning so much more about fundraising and different types of money. You know, when we started Calm Accountants, we got invited to a VC's office and we turned up with some lunches. We didn't really know. We knew that they were going to invest in us, but we didn't really know what we wanted. I was 21. They said they wanted us to come in for a chat. So, we went in. Yeah, we came with these lunches and we're like, yeah, let's have lunch. And then they asked us how much money we wanted. You said £10,000. They were expecting a pitch and you showed up with lunch. Yeah, they were expecting a deck. I don't know if we knew what a deck was. And then we pulled out our lunches and we just told them about the business and they said, so how much do you want? And we looked at each other like, yeah, maybe £10,000. That's what the legal fees will cost for this deal. And we're like, oh, I think we're okay then. No, but this is really great to meet you. Great. This is great. And then a few years ago, yeah, Pecs of the Food. Pecs of the Food. It's on us. We really wasted that for you. Just a few things that are in her way as you get older. But I also think that where people talk a lot about dark kitchens and the name Dark Kitchens. And when we started, no one knew. We had to explain to a lot of people what we were doing and what we were building. And as the market timing is important, maybe three years ago, we wouldn't have been able to kind of do the deals that we're looking at now, because the market didn't understand the asset class that we are building. And I do think that Dark Kitchens are a new asset class of real estate that it's the most important thing is like developing that piece alongside all of the stuff that we do in the operating business and all of the interesting tech that we're building and the clients that we're serving. The actual real estate itself is a new thing, you know, and it's an emerging new market. That is a new category. So the more that people understand what that is, the easier the ride is for you. So let's dive a bit deeper into your business then because you build infrastructure for kitchens. But that's not all you do and that's not all you have planned. So maybe let's talk about where you are today. Then we'll move to future plans. But you're in the business of essentially buying properties and turning them into something that didn't exist even a few years ago. How does the real estate, the property market in the UK where you operate now respond to something like that? Do you find that they're very open to those conversations or was it difficult to get in? Jenny, how are the landlords? I think that with Dark Kitchens, they've had a lot of bad press. So when we find a new location, we are aware that some of the councils, if you say you're a Dark Kitchen, don't get excited by it. But Karma Kitchen does things very differently because we're for startups and also for those large restaurants and chains. We go after, as we said, the whole food sector. We run a lot of programs like youth training and we run a food fellowship where we give free kitchen space for a year to different food brands. So we kind of want to be celebrated when we enter an area. You know, we have a lot of people coming down to our sites and actually purchasing food from our kitchens. So they're not your classic Dark Kitchens. So we've actually been really, really lucky. The council have been very on board with our spaces so far. In terms of the design of the space and who our brand appeals to, we are super focused on the idea that unless you build trust with the end eater, the end consumer, you know, people want to know where their food is made. They want to know what goes into it, who made it, if the chefs are being paid well. They want to know what kind of environment that the chefs are working in. And if you come to us, like our site, one of our kitchen sites, what you'll see is like natural light, like full of glass, pink tiles, colorful images, loads of people with their music on full. It's a real home for those people. It's a real hub, yeah. And that we want to tell that story to the consumers in the area around our spaces so that when we enter a new market, you know, people like, ah, yes, the Karmic Kitchen's open. We can't wait for all this cool food to come out of it. And like these new products, and it's so interesting and come down and like do a cookery course, do a youth training program with us. And our customer group, so obviously we've spoken about how we have the startups. They act as an amazing funnel for the rest of space. So 70% of those businesses start in our kitchen. And of course, a space like that has high churn and those businesses are quite vulnerable at times, especially in a pandemic. But we've seen so many of them grow with us, you know, with that we got day one of their business and now they're in three of our sites, which is such a cool story. And what we want to do is take them to, you know, 30 sites and we have the power to do that, which is amazing. What about expansion? Do you want to stick to the UK or do you want to expand geographically over time? We definitely want to expand it to Europe. Like that's priority number one. It's going to take us a few months, I think, from the point that we're at now to get there. We've got a lot of sites under construction right now at the moment in the UK, so we've got to get those open and running really smoothly. And then when they are, Europe is 100% on their agenda. There's so many amazing markets in Europe that we just love to be in and so many great businesses that we think we can really support and help. Come on, Spillabines, which markets are you looking at? We really want Amsterdam to be kind of the first city that we hit. We think that food production and delivery is incredible there. And you're also very close to Rotterdam where Unilever's headquarters are. So the idea is to help businesses grow and be hopefully bought by some of those bigger corporations. We like Paris and Berlin as well. Anyway, you know, we would like to probably spend anywhere that I want to spend a bit of time. Great weather, so it's also great. Go down south a bit. What does the city need to have for you to be interested in in the first place? Or is any city really open game? I think the key thing is that it's got a high population density or there are pockets of it which have a high population density. And it really helps us when there's an existing food culture, a really good food scene, and some delivery activities going on. When people are comfortable with the idea of ordering their food on delivery, that's helpful for us as well, as well as a very vibrant local food culture. You guys are a B2B2C company, essentially. So you sell to, essentially, restaurants, kitchens, and other people in the food supply chain, I would say. How do the conversations go, usually? How do you bring them in? Do they need a lot of convincing? What do you do lots of the sales so I'll turn to you? But how do those conversations usually go? To be honest, it's a quite easy sell because you're providing a solution. And when we first open our first site, nothing like that exists. So we were basically doing all of the capex for all of these food businesses. You're giving them a space where all they have to do is think about the food. And in our shared kitchen, we're doing everything, even chopping boards, pots and pans. So it's a real no-brainer if you want to grow your business. Also, more traditionally, if you're a restaurant, to get a restaurant, it can take up to, you know, a million pounds and you have to sign, like, a five to 10-year lease. And take you eight months. And take you eight months. What we're saying is it's half, it's less than half that money, will provide the space. It's a year lease for the six-month break-up course, but also share kitchens, monthly rolling. So if you want something even more flexible, we've got that. So it really is, at first, it was a tricky sell because nothing existed like that. You know, co-working exists, but not in food. And people were like, why do I want to share my space? But when you present it as, it will save you money, it will help you scale. And it's flexible. So if you don't like it, you can leave. And suddenly, people start to listen. And now we've got, you know, we've had a bit of press with our space. It's a beautiful space. So it sells itself. Like, it's all glass. It's so, it's really cool. The sell now is an easy one. It's like, we're lowering the barriers to entry to your business so enormously that it's, it just is a no-brainer to give it a go. And you walk into the space. Most people who walk into our spaces are like, wow, like, this is, this is so cool. It's all like, you know, they meet the other businesses and people have a good time. But I think also what we're starting to understand is that for many of our businesses, there's like missing pieces for food businesses that they struggle to understand their margin. That's a key piece. And also when it comes to the ancillary services and how much they're spending on all of their combined bills every month, our goal over the next few years, well, I guess we have like two goals, one on the physical infrastructure and one on the digital side of it. The physical infrastructure is obviously to grow to like 30, 40 sites, make all of our sites net zero. And by proxy, make all of the businesses that operate within our sites net zero as well. And the digital infrastructure side is like, how can we make everybody, one of our operations team, while it coined this slogan, which has like been core to our business, which is a busy business is a happy business. And when our businesses do well, that's when they feel good and they're the happiest. So how can we make our businesses do well in every space that we go into? And in order to do that, you need to have a great understanding of the data around the location that you're going into, the density, the area itself. And you need to understand your business's margins and what's feeling into that. So how much are they spending on their stock? Can we get them onto our preferred partner networks? How much are they wasting? How much food waste do they create? Can we reduce that? When do their team arrive and leave the site every day? Like, are they efficient using their team's time to give them and bringing all of that information into just one clear data point that a business manager, no matter what site they're in, or if they never visit the site, can easily just understand business performance in every common kitchen location that a business is in. That's like the next step for us for the next year alongside of the site building. This just popped into my head. This didn't come up, come to me in the prep, but what you just said that essentially you built all this knowledge and data points about businesses, that's something you could sell as a service, almost as a consulting business on site, is that also in the plans? Because it sounds like a logical step to take. We just want our businesses, more than anything, to do well. It benefits our physical space sell, but it's a service that we add a lot of service level on top of the space, and some of it we build for. But it's about whatever they're getting built for, whether it's extra storage, or laundry, or insurance, or using this preferred partner network or understanding their margin, that it's all in one place and from start to finish, you just have one sally's, cakes, or genie's, what kind of product would you make? Genie's kombucha, she joins, I call Genie's kombucha, and from the first call we have to her leaving the space and going into her co-packing, I'm imagining a whole life for you now. Thank you. It's going well for you. You've expanded to co-packing, and you've been offered from our space now, the whole journey. You're just one data point moving through the space, and you can track your margin, and I'm helping you do it on every different aspect. Because we build the physical infrastructure, you can have a ton of IoT, like showing how much water usage you're using, and how much electricity you're using, and how heavy your bins are every day, everything through to this is how much your product is costing you to make. So that's the good. I don't know if the audience picked up on this, but Genie's mentioned something interesting, is that you also have the transparent separator, so everything is glass, so the restaurant business can also see each other, which is very counter to what people think of our kitchen is, I think it's a very close space, cubicles, you don't really see whatever else is doing. Is that an intentional decision on your part? So important, when we used to work in kitchens, you would do like the graveyard shift, and you'd be on your own at three in the morning, and it's a really depressing place to be. What we wanted is at any point in the day, even if you're just one chef working for one business, you can always see someone else, and natural collaboration happens from that. We have restaurants watching cake makers in the share kitchen, who then collaborate and stock their cakes, and that's without us actually doing anything, but it just creates more of a community. It's so important to be able to see other people work. So the reason you raised as much money as you did last year was because you need to buy properties, so just to be clear, you don't lease, you buy property, which means you have to very quickly educate yourself on real estate market and buying buildings and whatnot. So what are some of the things that you've learned in a nutshell that you can share with the audience? I think that about buying property. I think anyone can learn anything. It's, you know, real estate, I'm not going to say real estate is like a simple industry. There's a lot of complexity there, and a lot to understand, but if you are, if you need to, you as an individual and you as a team can learn and bring on anybody that you need to grow as a person and also as a culture. And definitely like a relationship business, you build a network of different, you know, agents and landlords that you work with who think of you when they have a certain site and they come to first. So it's been a real learning curve. I spend a lot of my time in like a hard hat and high vis, very glamorous side. It's gone from a hair net in the kitchen and gloves to hard hat and high vis. So I'm using it like some strange person on an industrial site. When we turn up to industrial sites, people were a bit confused, but it's getting better. But I guess the benefit is also once you've learned, it doesn't differ at all that much from other markets in Europe. Once you get there, then it's just sort of fair game. That's exactly it. I think that, you know, there are a few businesses all over Europe. There are a few businesses who do all of the same things that food businesses in the UK do. We serve people that make wedding cakes. We serve people that do corporate catering and people that do delivery. And each market has its own unique kind of profile of different businesses. And the real estate that we buy into also exists in every major city all across Europe. So I do feel like this is a business that can scale and definitely will. And especially if you're providing a very good quality of like background operation like tech to support billing and to support all make your systems very robust. Then, you know, then you're in a good position to like move across Europe. In each of our spaces, there are around 60 businesses. Yeah, I think that they're all doing very different things. And depending on what time you go down site, it's a completely different space. Like the morning is all production. So anyone doing cakes, granola, catering. The afternoon is delivery like crazy for drivers. And overnight it's often bakers. So it's a 24 hour space for so many different types of profiles. And what type of food business don't you have yet that you think you're willing the future that you want to address? Food science is something that we've started having more and more food science businesses come. So we had a company called Jelly Drops who make hydration eats for people with dementia and so cool great product. They started in our first. We love to get product. It's great. We get people so early in their journey before they go out and like outsource production. But that's a big part of our expansion plans. So to build kitchens delivery for production, but also food science. And we're also looking into vertical farming too. We've talked to a lot of people in the last few weeks and even at Slashwood doing such interesting things with like meat culture and like cheese culture and downstream processing of all of these new innovative products. And we love to be able to provide that more like life science, the kind of crossover between life sciences space and like food space, food production space for those kind of businesses thinking about the future of food. I think that if you're building space that is like net zero in the next couple of years and you've got all of these interesting services and products like that should be a home and hub as well for all of the future pieces of the food market. And you're also in a position where you're forced to look at the trends in mobility for the delivery part of things. What are some of the trends that you can see on that level that will change or dictate the way you run your business in the future? So one thing that we are providing in all of our future sites is EV charging points. And the reason for that is we want all of our kitchens to be serviced by electric vehicles. And luckily we're partnering up with a big fossil fuel company but they're now moving only to renewables. So all of our substations and electricity connections will be powered by renewables only. And that means that not only, you know, what we want to create is like basically areas for drivers to charge their vehicles and also local residents to see our our kitchens as a place where they can stop and also charge up their their vehicles very, very close to their house. And we're definitely seeing a trend across the board in delivery companies to move to electric and to provide their own fleets as well, which we are all for because that helps us build good relationships with the communities around us. The other trend we're seeing is virtual brands. I don't know how much you know about that but it's brands that don't have bricks and mortar. They're purely virtual. They take a kitchen space. They run 10 to 15 concepts, all different branding. And that has been just growing so much over the last kind of years since COVID. It's definitely a hard one to make work because you have to do so much work on the marketing if you don't have a restaurant. But the ones that do well are doing really, really well. Great. Do you see yourself being acquisitive in the future? Maybe buying similar businesses to yours? If there are any out there, actually, I don't know. I think we would love to. Definitely that are aligned in the way that we build. We build in a very different way to our competition. You know, we are focused on the whole food sector, deliveries are a massive part of our business. I would say it's 50% is what we're aiming for it to be. But we definitely are keeping our eyes open. We're about to get to the end of the session. We have about a minute and a half left. So maybe for the aspiring entrepreneurs in the room, what you've learned so far? What kind of advice would you give to people who also want to raise 300 million euros instead of 3.5? So I would say to not be afraid of your competition. When we started, I was always terrified when another business came along and was doing the same thing. When you have competition, what it does is it changes the mindset of the individuals. So with lunch delivery, when delivery came around, before delivery, we were trying to pitch people on getting their food delivered to their desk. That sounds crazy now because everyone loves delivery. But at the time, people were like, why would I want my food delivered? Then delivery just changed the way that people worked and then it was such an easy sell. The same with Karma Kitchen. The more people opening space like this helps us become an asset class and helps people think, I'm not going to build a kitchen. I'm going to go to a space that exists. So never kind of look at competition as a negative. It can really help your business would be mine. Know what kind of money you need and what kind of returns your business is going to generate. If you're generating like SaaS, if you're like a SaaS business and you're delivering a kind of, you potentially deliver a 20X return in a year, I mean, amazing, definitely BC is for you. But if you're doing something a little bit more agnostic where just know what your return profile looks like and then you'll be able to match the right kind of money to your business. And there is a lot of money out there as we realize when we started to look and look in the right places. But I think also it's just important to know which kind of money is going to suit you the best basically. That's great advice from both of you. That's all the time we had. It flew by. Thank you for sharing your insights. I'm going to keep watching your journey. I think it's really interesting. Thank you for joining Slush and thank you for your attention. Thank you very much. See you later.