Yaofei Feng met his future business partner Randy Wu online in 2013, via the popular multiplayer game Dota 2.

But after playing together for nearly a year, Wu, then a Simon Fraser University undergraduate, withdrew. Feng, then a software engineer in Amazon’s Seattle office, asked why he quit.

“He mentioned he started a business,” Feng told The Logic.

Nine years later, that business—Fantuan, the Burnaby, B.C.-based food-delivery app the two now run—has over 500 employees and delivers from more than 20,000 restaurants, 85 per cent of which focus on Asian cuisines, to 1.5 million users sprawling across North America.

Fantuan is one of many niche food-delivery apps in Canada that focuses on the Chinese community, along with competitors like Lanyangyang and Hungry Panda. One difference: it has the backing of prominent Chinese venture capitalist Eddie Wu, one of the co-founders of Alibaba (no relation to Randy Wu). Eddie Wu’s Vision Plus Capital was part of the US$35-million Series B Fantuan raised in January 2021, a round led by Chinese private equity firm Orchid Asia and including Celtic House Asia Partners, sibling firm to Ontario-based Celtic House Venture Partners, which spun out of an investment firm established by Terry Matthews, the godfather of the Kanata tech scene. 

According to Celtic House Asia Partners, the Series B valued Fantuan at US$100 million. Fantuan would not confirm that valuation. 

However, Feng told The Logic, the company is now raising a Series C—and looking for more Canadian investors. “We have to be more North American-style. That’s definitely the way we run our business. We’re not a Chinese company, right?” said Feng.

After Wu pulled out of Dota 2, he visited Feng’s office in downtown Seattle over Christmas 2014 to meet him for the first time in real life. They hit it off immediately. The next day, Feng drove up to British Columbia to take a look at Wu’s business. 

“Randy delivered some orders together with me and showed me how this business works,” said Feng. 

At the time, the fledgling Fantuan platform operated only in Burnaby, where Wu was completing his bachelor’s degree in economics.

Shortly after the trip to Canada, Feng made the decision to quit his full-time job at Amazon and join Wu’s food-delivery business. 

Feng and Wu had confidence in the Fantuan concept as both had witnessed the rise of the meal-ordering industry in their home country. The online food-delivery industry in China was on a tear at the time. After first becoming popular among students in dormitories, market leaders like Ele.me and Meituan were expanding rapidly through the country, with backing from Alibaba and Tencent, respectively. By October 2014, Ele.me was operating in nearly 200 cities in China, offering the services of 180,000 restaurants. The value of China’s online food-ordering market grew from nearly US$8 billion in 2013 to US$13.5 billion in 2014. Yet Wu hadn’t seen a similar app catering to the same demographic in Canada. 

Feng said food-delivery apps in China burn a lot of money to acquire customers, and to establish themselves as a habit for those customers. “Once the international students come to school, they found that there’s no such service available in Canada,” he said. 

After Fantuan had expanded its business to the U.S., a video documenting a day in the life of a Fantuan delivery worker went viral on Chinese social media in 2019—and caught Eddie Wu’s attention. The investor’s team reached out to Fantuan, and he hopped on a private flight and flew in to meet with the founders. 

“We met in Richmond, visited some restaurants and interviewed some delivery drivers together. And he made [the] investment decision immediately after the meeting,” said Feng. 

Dalhousie University food-distribution professor Sylvain Charlebois said as the food-delivery industry continues to evolve, he’s expecting the market to be “more granular” in a way that could be promising for Fantuan’s future.

“I’ve always believed that the food-delivery app 2.0 environment will become much more specialized,” said Charlebois. 

Charlebois said the major apps on the market right now are not very sophisticated from a cuisine perspective.

“When you use the major ones, you quickly realize that the offering is often skewed by some of the major chains. If you’re looking for a special type of cuisine, it requires a lot of work,” he said. 

Charlebois said he doesn’t only see potential in the specialization of a certain type of cuisine, but dietary preferences, as well. 

“I think there is an absolute market for that,” he said.

Unlike Fantuan’s competitor Hungry Panda, which is backed mostly by European investors, Fantuan has mostly attracted investors based in China or with Asian roots. 

“I think the Canadian investors or Canadian media, they ignore these markets,” said Charlie Wang, operating partner at Celtic House Asia Partners, which invests in early-stage consumer marketplaces and digital health startups in North America and China.

Wang said when the firm invested in Fantuan in 2019, the company was already making profits and had “good operations.”

“That is really rare in North America,” said Wang, adding that more and more Chinese entrepreneurs are taking what they know has worked in China and starting businesses outside of the country.

“Before it’s copied to China. Now it is copied from China,” said Wang.