Grocery delivery apps have been a big deal this year for consumers stuck at home and unable (or unwilling) to go to restaurants or grocery stores. and for investors keeping an eye out for the opportunity to support emerging stars to help them grow.
Today came the latest development in this story: HungryPanda, a Mandarin language app specifically aimed at Chinese consumers outside of China, has raised $ 70 million to support its global expansion in the delivery of food from Chinese restaurants and Asian restaurants To continue grocery stores for the Chinese diaspora.
It is estimated that around 50 million Chinese live overseas (including students and first-generation immigrants, as well as outside the mainland, Taiwan, Hong Kong, and Macau), with most of them focusing on other Asian countries that is a specific destination to start with. In the longer term, there are tens of millions more people when you factor in the second, third, and later generations of people, although that will likely bring big changes to the app, including the introduction of other languages.
Funding comes due to an increase in HungryPanda usage . It now lives in 47 cities (up from 31 as of February this year) in Australia, Canada, France, New Zealand and the UK – where it was founded. Eric Liu, CEO and Founder of HungryPanda, has grown 30x in the past three years, and said in an interview that it is already profitable in its earliest markets in the UK and New York City and on the safe path the Black is also in other places.
Series C is led by Kinnevik (a prolific supporter of e-commerce startups), which also includes 83North and Felix Capital (who backed HungryPanda in their last $ 20 million round earlier this year), as well as Piton Capital and Burda Participate in Principal Investment.
HungryPanda is not currently disclosing its rating, but it's noteworthy that most of its four-year lifespan has been spent in a bootstrap – only $ 90 million has been raised so far, all this year.
Food apps have proven themselves this year. During the Covid-19 pandemic, many services were already popular with consumers wanting to use a phone or website to browse and order food to be brought to their doorstep and restaurants were closed.
E-Marketer estimates that usage has increased by more than 25% in the US alone. However, it still all came at a cost. For example, the increased measures that had to be taken to ensure social distancing meant higher costs for the companies, which are often already overstretched in their unit economy.
However, in this sea of apps, it can be difficult to distinguish from one another. In Great Britain, for example, the delivery bags and logos of the two big competitors Deliveroo and Uber Eats looked the same.
HungryPanda is a very different bird than this one. For starters, the entire app is in Mandarin. And it mainly (in most cases only) focuses on Chinese food. If you want pizza or a burger, or if you want to read the menu in English, go elsewhere.
The app was founded four years ago by Liu, an international computer science student at the University of Nottingham. When he came from China, although there are indeed a number of Chinese restaurants in town, it was almost impossible for him and other Chinese students to order from them.
The reasons? All of the menus were in English and the names of the dishes as translated didn't mean anything to them; and in any case, they have all essentially been filtered and altered for local (read: British) palates. This was a bigger thing than it could be for some: Chinese people prefer to eat "traditional" food, Liu said, and they take the business of eating very seriously.
His solution was to create an app that would provide students like him with all of the information in a format they could actually use, including items that Chinese customers would normally only be offered on Mandarin side menus, if at all.
It is interesting to note that while the economics of grocery delivery units in a sprawling city can be a major challenge, this typically does not apply to HungryPanda. At a company like Deliveroo, the rule of thumb was usually to go a little over two deliveries per hour per driver to make that hour profitable. However, this is not always possible in the real world. (And that's before counting all the other costs related to marketing, etc.)
However, HungryPanda delivered to students in dormitories and often ordered in groups, "family style" meals. This meant that HungryPanda weakened much of the typical unitary economy, said Antoine Nussenbaum, co-founder of Felix Capital.
"This has made the delivery efficiency much higher," he added.
The same goes for the delivery of groceries. Panwen Chen, the global vice president of strategy and a former employee of the company, was also a student in Nottingham and said that since even students don't want to eat out all the time, it is next to impossible for him and others to get food like him.
"I didn't have a car. To get to the Chinese grocery store in Nottingham, I had to take two buses or walk 50 to 60 minutes," he said. "Before you know it, you are dealing with very heavy bags of food. It's not a nice experience. We then started working with food and we found that we already had the infrastructure to deliver food This was a natural extension of our activities, especially since the church was the same. It helped us understand what they wanted. "
He added that ready-made take-away meals are still the bulk of the start-up business, and both are growing very rapidly.
By loading one and two functions into the app, HungryPanda is set up so that it can continue to grow in the future. Asia has been a pioneer in this area, with apps like WeChat and especially those that focus on delivery services like Grab and are carving out a place as "super apps" offering users a wide range of services that go beyond the core. original purpose of these apps.
Consumers and companies in the wider network are used to the existence of “super apps” and are well used. In a world where some native Chinese apps have found it harder to break into international markets (and in some cases like the US, they may be downright encouraged to do so), this offers HungryPanda, a UK app, an interesting position, possibly as a partner or as a strong competitor in these markets.
In fact, it already offers users of partner organizations a wide range of offers that go well beyond ordering staple foods.
HungryPanda started out as a side project to school for Liu, and his plan was to do post-graduate work at the London School of Economics after graduating from Nottingham. Business picked up, however, and so he postponed it for two years. Last year he received a reminder from the LSE to let him know what to do next and said he had postponed indefinitely for the time being.
"I think it was a good experience not only for me but also for the Chinese community that is benefiting us," he said. Today he lives in New York City and is building the business in the USA.