When big platforms have carved out large swaths of the delivery market, the best thing for an upstart company to do is specialize.
For Chowbus, that meant building a food-delivery business that finds restaurants whose cuisines specialize in regional cuisines from Northern and Southern China, Japan, Korea, Taiwan, Thailand and Vietnam.
It's a strategy that has now netted the company $33 million in financing led by the Silicon Valley-based investment firm Altos Ventures and New York's Left Lane Capital. Hyde Park Angels, Fika Ventures, FJ Labs and Silicon Valley Bank also participated in the round.
Founded four years ago in Chicago by Suyu Zhang and Linxin Wen, the company said that its goal was to connect people with authentic Asian food that's not easy to find on delivery apps. Over the past year, the company touted significant growth in its business, a traction that can be reflected in its decision to bring on the former chief operating officer of Jump Bikes, Kenny Tsai, as its chief operating officer, and Jieying Zheng, a former Groupon product leader as its head of product.
“When we say we’re true partners to the restaurants we work with, we mean it. By eliminating hidden fees, helping them showcase their best dishes, and other efforts we make on their behalf, we really go the extra mile to help our restaurant partners succeed," said Wen, Chowbus' chief executive, in a statement. "We only succeed if they do.”
And seemingly, Chowbus is succeeding. The company raised $4 million in its first round of institutional funding just last year and its rise has been rapid ever since.
The Chicago-based company said it would use its new funding to expand to more cities across the U.S. and add new products like a "dine-in" feature allowing diners to order and pay for their meals on their phone for a contactless experience at restaurants in cities that have flattened the curve of COVID-19 infections and are now reopening.
Chowbus pitches its lack of hidden fees, and its footprint across 20 cities in North America, including New York, Boston, Philadelphia, Chicago, Atlanta, Los Angeles, the Bay Area, Seattle, and many others. In Los Angeles, the company offers menus in Mandarin and Cantonese and allows its users to bundle in a single delivery dishes from multiple restaurants.
Other companies are experimenting with specialization as a way to differentiate from the major delivery services that are on the market. Black and Mobile, which launched in Philadelphia but is in the process of expanding across the country, is a delivery service focused on Black-owned restaurants and food stores.
Founded by David Cabello, Black and Mobile was started in 2017 by the 22-year-old college dropout. The company launched its first operations outside of Atlanta earlier this month and is available on iOS.
“The market is experiencing a permanent shift from offline to online ordering, a trend that Chowbus is actively driving,” said Harley Miller, managing partner at Left Lane Capital . “Focusing on this large and loyal constituency with a vertical-approach to supporting Asian restaurants and food purveyors has allowed Chowbus to differentiate itself on both sides of the marketplace. The capital efficiency with which they have operated, relative to the scale achieved, is extraordinarily impressive, and not something we often see.”