Environmental Challenges

When people leave China and relocate to other countries, they miss the ease of having applications that transport meals to them. For the past nine years, Fantuan, a startup located in Vancouver, has been working toward bringing the experience of Chinese meal delivery platforms to Western countries. Just recently, it successfully raised some more funds to make more significant progress toward its aim of offering authentic Chinese cuisine to people all over the world.

The venture capital firm Celtic House Asia, which invests in first-generation immigrants, and GrubMarket, a startup food supply chain with a valuation of over $1 billion in 2021, were responsible for raising $40 million for Fantuan, which translates to “rice balls” in Chinese.

Vision Plus, a venture capital business established by Eddie Wu, who was recently named as the chief executive officer of Alibaba, and JSD Capital, a boutique private equity firm, are two other investors participating in this initiative. Following the completion of the fundraising, the firm chose not to publish its valuation.

Besides institutional investors, Fantuan also received funding from several influential powerbrokers in China’s retail technology sector. These powerbrokers include the co-founders of Ele. I am a pioneer in the field of food delivery. Alibaba acquired me in 2018. Bianlifeng, a chain of unmanned convenience stores; Qunar, a GGV-backed travel booking website that larger rival Ctrip purchased; and Dianping, a more capable Chinese version of Yelp that Meituan, a significant player in the food delivery sector, owns.

Randy Wu founded Fantuan in 2014 while attending Simon Fraser University to study economics. He was inspired to create Fantuan by the rapidly growing popularity of meal delivery applications, specifically in China. Before dropping out of college to work full-time on what he considered his shot at “copy from China,” Wu ran the firm himself and wore numerous hats initially. One of these hats was physically carrying meals around the city of Vancouver. Notably, Meituan served as his standard of measurement.

Yaofei Feng, his co-founder, whom he had met online while playing Dota 2, joined Wu almost immediately. Feng bravely decided to leave his position as a software engineer at Amazon in Seattle and move to Vancouver due to Wu’s business venture.

As a result of the migration of millions of Chinese people to Western nations, the company’s founders were counting on the rising demand for high-quality Chinese cuisine in Western countries. As of 2020, there were approximately 10 million migrants of Chinese descent from other nations, according to research by the International Organization for Migration (IOM).

“Food from home is a kind of spiritual refuge when you are living abroad,” said Wu in an interview with TechCrunch. These words were taken from Wu’s statement. Even though Chinese cuisine was complicated in Saskatchewan, I still vividly recall the first Chinese supper I enjoyed three months after arriving there.

There is more to Fantuan’s aim than just delivery. Taking a page out of Meituan’s playbook, an all-in-one platform for local services in China, the company’s ultimate goal is to become the destination for Chinese people outside China to find and enjoy various leisure activities.

Additionally, its partnership with GrubMarket is reminiscent of Meituan’s vertical growth, in which the food delivery network connects restaurants with producers of ingredients supplying those eateries. By facilitating connections between farmers and clients such as Whole Foods and Costco, GrubMarket may use Fantuan to expand its reach to include mom-and-pop eateries in the future.

In just two years after its inception, Fantuan has established itself as the leading platform for the delivery of Chinese cuisine in Vancouver and has reached net profitability. It continued to be lucrative for another five years until the COVID-19 epidemic was in full swing, at which point it began aggressively expanding into the United States. This year, its yearly income is anticipated to be close to one hundred million dollars.

Delivering Chinese cuisine promptly might be challenging. The process of cooking can take a considerable amount of time. In contrast to platforms that are not exclusive to any one cuisine, those that concentrate on a single category have a smaller density of restaurants, which results in a longer delivery time. On the other hand, Wu said that Fantuan was able to attain an average delivery time of forty minutes across several cities, including Vancouver, Toronto, London, San Francisco, and Sydney.

There is a correlation between the availability of drivers and the delivery time. As a result of Fantuan’s preference for Chinese-speaking drivers who can converse with immigrant restaurant owners, recruitment attempts may not be successful in densely populated and costly cities like San Francisco. According to Wu, drivers are driven to Fantuan because the average order value from Chinese restaurants is almost “double” compared to that of significant food delivery platforms. This means that drivers receive more tips during their deliveries.

According to Wu, Fantuan’s customer retention rate is about 90 percent after five orders in twenty-four months. Active users make up about 1.2 million of the two million accounts that have been registered with the platform.

Wu thinks that Fantuan’s capacity to bring on board a wide variety of genuine Chinese restaurants is one of the principal advantages of the company. The platform uses the on-the-ground sales formula that Chinese technology companies frequently use to digitize traditional retail. This recipe entails physically visiting clients and creating connections during face-to-face interactions.

“Our business development specialists would each manage approximately 80 restaurants and conduct frequent visits to these customers, teaching them tips such as how to do marketing and how to pack more efficiently for delivery,” said Wu. “They would also pay frequent visits to these customers.”

As of right now, Fantuan has over 500 employees located all over the world. At the beginning of this year, Yinfeng Lu, who had previously worked as a sales executive at Meituan, became the chief operating officer.

According to the World Economic Forum, the yearly demand for automobiles in Africa is around 2.4 million, while the demand for commercial vehicles is approximately 300,000.

This demand is growing due to a rise throughout the continent in the amount of discretionary money available, a robust expansion of the middle class, and rising urbanization. Even though most vehicles satisfying this demand are pre-owned, the rate of automobile ownership in Africa is significantly lower than the worldwide average of 203 cars per 1,000 people.

In the past, we have covered new businesses in the automobile sector, shining a spotlight on essential players such as Autochek and Moove. Both companies address ownership by catering to customers and drivers, respectively. However, financing a car extends beyond the purview of customers and drivers; there is a significant possibility of offering services suited for dealerships. Small auto dealers rely heavily on vehicle finance since it facilitates their day-to-day business activities and helps them maintain lower operating expenses.

When interest rates on loans and credit cards are reasonable, consumers gain, which leads to an increase in the number of automobiles on the roads in Africa. This underscores the necessity for vehicle dealers to have access to inexpensive finance and business solutions.

In this strategic market, Shekel Mobility is a company that receives support from YC. The B2B auto dealer marketplace has raised over $7 million in investment, with over $4 million raised in loans and $3.2 million raised in equity. In an interview with TechCrunch, the company’s co-founder, Benjamen Oladokun, stated that the money would be necessary to quadruple the company’s current ARR, which is a little over $2 million, and that the company will leverage this momentum as it prepares for its next pricing round. The startup company announced in January of this year that it had received a pre-seed investment of $1.95 million, with participation from Y Combinator, Voltron Capital, and Zedcrest.

These investors participated in the subsequent seed round for Shekel Mobility. This time around, MaC Venture Capital and Ventures Platform took equal leadership roles in the seed round.

Y Combinator, Rebel Fund, Unpopular Ventures, Maiora Capital, PageOne Lab Inc., Phoenix Investment Club, Heirloom VC, Pioneer Ventures, and other angel investors are also among the company’s investors. During this time, Zedvance, VFD Microfinance Bank, Zenith Bank, and Fluna, amongst others, provided the debt component. According to Shekel Mobility, several financial institutions have leveraged the startup’s platform to fund automobile dealerships.

Together with Sanmi Olukanmi, Oladokun established Shekel Mobility. Shekel Mobility was founded on their combined expertise in the automotive business, which included the founding and subsequent sale of Eazypapers Technologies. Eazypapers Technologies was a digital vehicle documentation platform that catered to the FMCG, mobility, and logistics industries.

This so-called mobility fintech assists auto sellers in the African used car industry, estimated to be worth $30 billion, in finding, financing, and selling vehicles. Shekel Mobility seeks to establish itself as the leading platform to create and expand a vehicle dealership, locally or digitally, by 2025. More specifically, the company hopes to build the most significant auto dealership ecosystem possible, with yearly transactions totaling $10 billion by that year. Today, the auto dealer marketplace has been responsible for over $56 million in transactions. This has helped over 1,400 auto dealers expand their businesses by increasing the number of automobiles in their inventory and their sales across 7,000 vehicles.

Shekel Credit, the company’s main product, is the driving force behind the company’s expansion. This product gives car dealers instant access to finance, with credit limits that may go as high as $200,000 for purchasing a vehicle but more commonly range from $5,000 to $20,000. Shekel Credit is the company’s namesake. The financing system calls for the dealer to contribute thirty percent of the overall cost, which would equate to three thousand dollars in the example of a ten thousand dollar automobile purchase. Shekel lends the remaining 70 percent to the dealer as a loan. Subsequently, upon the sale of the vehicle to the end customer, which typically occurs within three months, the auto dealer sends money to Shekel to cover the interest on the loan and the transaction costs involved with the sale of the automobile.

Oladokun mentioned on the call that Shekel Mobility’s approach, which controls the whole process of purchasing and selling automobiles through dealerships, assures that it will record a 0% default rate. This model involves Shekel Mobility controlling the entire process. In a statement, Olukanmi further underlined that although there is a significant gap in directly giving financing to car dealers, Shekel Mobility only funds auto retailers that it “believes will have a lasting positive impact on consumers.”

Shekel Mobility is planning to expand its product offerings, one of which will be called Shekel Business. The company’s credit product has driven its success over the previous 20 months, and this expansion will build on that success. According to the company’s creators, this application will attempt to automate the informal trade activities inside the auto dealership sector. The suite of tools is intended to assist dealers not just in financing their inventory but also in expediting sales and structuring operations. This is in addition to helping dealers in the traditional sense of funding their stocks. “One of the fundamental things we’ve built is the ability to buy a car without collateral,” said Oladokun. “We got our start by making loans to dealers, but now we’re looking to cut the cost of owning car dealerships by providing additional digital tools and physical infrastructure.”

Kola Aina, founding partner at Ventures Platform, pointed out that Shekel is developing a significant market-creating invention that is key to increasing Nigeria’s automotive sector and will soon be essential to extending Africa’s automotive industry. Shekel Mobility can alter and spark the automotive sector in Africa, according to Marlon Nichols, founder and managing partner at MaC Venture Capital, who was commenting on the round. Shekel Mobility funds and empowers small enterprises that require funding to survive; thus, Nichols believes it can do both things. According to what he mentioned, “the team is enabling millions of dollars to move through the economy of Nigeria while at the same time providing locals with affordable automobiles.”