Vancouver-based food delivery platform Fantuan has recently secured $40 million in a Series C funding round to expand its efforts in bringing authentic Chinese food to people globally. The company, which aims to replicate the convenience and experience of Chinese food delivery apps in the West, has been operating for nine years and has seen significant success in Vancouver and the US. With this new funding, led by venture capital firm Celtic House Asia and food supply chain startup GrubMarket, Fantuan plans to further accelerate its growth.
Key Takeaway
Vancouver-based food delivery platform Fantuan has raised $40 million in a Series C funding round to further expand its services and bring authentic Chinese food to people globally. The company, which aims to replicate the success of Chinese food delivery platforms in the West, has achieved profitability and plans to become an all-in-one platform for leisure activities for overseas Chinese. With an average delivery time of 40 minutes and high user retention rates, Fantuan is poised for continued growth in the food delivery market.
Raising Capital from Key Investors
In addition to Celtic House Asia and GrubMarket, Fantuan’s Series C round included participation from several notable investors. Vision Plus, a venture capital firm established by Alibaba’s newly appointed CEO Eddie Wu, and boutique private equity firm JSD Capital joined as investors. The company also received investments from powerbrokers in China’s retail tech space, including co-founders of food delivery pioneer Ele.me (acquired by Alibaba in 2018), unmanned convenience store chain Bianlifeng, travel booking site Qunar, and Chinese counterpart of Yelp, Dianping.
Background and Expansion
Randy Wu, the founder of Fantuan, established the company in 2014 while studying economics at Simon Fraser University. Wu recognized the demand for high-quality Chinese food in Western countries and aimed to replicate the success of Chinese food delivery platforms like Meituan. He was joined by co-founder Yaofei Feng, and together, they built Fantuan into a top Chinese food delivery platform in Vancouver. The company achieved profitability within two years and expanded its services to the US during the COVID-19 pandemic.
Building an All-in-One Platform
While Fantuan focuses on food delivery, its long-term ambition goes beyond that. Inspired by the success of Meituan, the company aims to become an all-in-one platform for leisure activities for overseas Chinese. Fantuan has also partnered with GrubMarket to connect farmers with customers and provide a wider range of services to restaurants. This vertical expansion is similar to Meituan’s approach, where the platform connects restaurants with ingredient suppliers.
Achieving Efficiency and Customer Satisfaction
One challenge in Chinese food delivery is the cooking process, which is often time-consuming. However, Fantuan has managed to achieve an average delivery time of 40 minutes in cities like Vancouver, Toronto, London, San Francisco, and Sydney. The company’s ability to maintain customer satisfaction and high user retention rates is attributed to its diverse range of authentic Chinese restaurants and its approach to building in-person relationships with restaurant owners. Fantuan’s average order value from Chinese restaurants is nearly double that of mainstream delivery platforms, resulting in increased tips for drivers.
