Chicago-based Chowbus also started out as a delivery service in 2016, focused on providing a way for mom-and-pop Asian restaurants to expand their customer base. Co-founders Suyu Zhang and Linxin Wen grew the company to over 20 cities by 2020 and raised over $108 million in venture capital funding, including a $33 million round in 2020.
Then in 2022, Chowbus pivoted to providing restaurant management software and point-of-sale services, Yaofei Feng, Fantuan co-founder, told TechCrunch. A year later, it had over 1,000 restaurant customers.
“We are in a similar industry, but each has a particular demographic coverage,” Feng said. “Now we cover more in Canada and they are more in the middle and eastern sides of the United States. We wanted to get better penetration and acquire more customers so we sat down and had a conversation.”
With the acquisition comes a partnership between the two companies that will meld each of their strengths with local Asian restaurants: Fantuan’s rapid food delivery process with Chowbus’ restaurant management software.
“With the rapid growth of the restaurant SaaS business line, we want to focus and develop better products and services for merchants,” said Linxin Wen, founder and CEO of Chowbus, in a statement. “We are confident that our partnership with Fantuan will provide improved and expanded services for merchants across food delivery, restaurant SaaS systems and beyond.”
Meanwhile, Fantuan was founded in 2014 by Randy Wu and operates in over 60 cities across Canada, the United States, Australia and the United Kingdom. In addition to restaurant delivery, the company also works in the fresh grocery delivery and dine-in service segments. In December 2023, Fantuan raised $40 million in Series C capital.
About 20 employees from Chowbus will join Fantuan, which will also manage Chowbus’ fleet of independently contracted delivery drivers, Feng said.
After consolidating Chowbus’ delivery business, Fantuan plans to solidify its Asia-focused food delivery services across cities in the U.S. where it has just 10% penetration of the U.S. market, Feng said. After the acquisition, the U.S. market share for Fantuan will be over 60%. The two companies also want to help restaurants gain additional business and convenience through order automation and more revenue.
The food delivery industry is undergoing an interesting time. JOKR is making it work, while Getir pulled out of some markets over the summer. More recently, we saw Uber announce it would close Drizly after acquiring the alcohol e-commerce business three years ago, and Jumia said it was discontinuing its food delivery service due to “deep-pocketed aggressive rivals,” according to CEO Francis Dufay. Meanwhile, antitrust regulators in the European Union had similar cartel suspicions and raided two online food delivery companies in November. And Indian food delivery company Swiggy went on a buying spree.