Chicago food-delivery platform Chowbus secured a $33 million Series A round of funding Wednesday to expand its tool that connects diners with mom-and-pop restaurants and stores offering high-quality, authentic Asian food.
Subscribe to the Crunchbase Daily
“Asian restaurants, along with pizza, are the original take-out and delivery operations and know how to offer much better service to diners,” Kenny Tsai, COO for Chowbus, told Crunchbase News.
Altos Ventures and Left Lane Capital led the new investment with additional participation by Hyde Park Angels, Fika Ventures, FJ Labs and Silicon Valley Bank. In total, Chowbus has raised $38 million, including $5.1 million in two previous seed rounds, the most recent a $4 million round in 2019.
The company plans to use the funding to grow its business, which includes expanding into new cities, as well as building new products for the app, Tsai said.
What you should know
Chowbus is the 4-year-old brainchild of Suyu Zhang and Linxin Wen, who wanted to connect people with Asian restaurants that do not typically work with other third-party food-delivery apps. In fact, 50 percent of Chowbus’ restaurant clientele do not work with other platforms, Tsai said.
Due to many of the restaurants not being as visible, the app is dish-focused so chefs can highlight the dishes they are most proud of, he added.
“That is a big differentiator and a very different user experience,” Tsai said.
In the past few years, Chowbus has grown rapidly, increasing revenue by 700 percent year over year and raising its employee headcount by 300 percent. The company says it now has 300 employees spread across more than 20 cities in North America, including New York, Boston, Philadelphia, Atlanta, Los Angeles, the Bay Area and Seattle, in addition to its Chicago headquarters.
What investors are saying
Harley Miller, managing partner at Left Lane Capital, said in a written statement that by focusing on the independent side of the Asian restaurant market, Chowbus has been able to differentiate itself from competitors.
“The market is experiencing a permanent shift from offline to online ordering, a trend that Chowbus is actively driving,” he said. “The capital efficiency with which they have operated, relative to the scale achieved, is extraordinarily impressive, and not something we often see.”
Next steps for Chowbus
Meanwhile, Chowbus will continue to expand into new cities, help clients more effectively manage their businesses, and develop new offerings such as grocery delivery. It recently opened in Toronto, Houston and Los Angeles, but is also establishing a presence in smaller college towns, such as Champaign, Illinois, and West Lafayette, Indiana.
“There is a demand for quality food no matter where you go,” Tsai said. “One of our focuses is to help our restaurant clients manage more efficiently, from a dining perspective, to make it as easy as possible. We are looking to build a long-term business, how we have been going about doing this, by focusing on a segment, shows that.”
Illustration: Li-Anne Dias