Fantuan is Metro Vancouver’s multimillion dollar tech secret

This article is a collaboration with Burnaby Beacon. Want to learn about Fantuan’s cultural importance? You can read the other half of this story here.

Fantuan – a food delivery platform – was born out of the SFU campus in 2014, thanks to demand from international students looking for delivery of authentic, homestyle Chinese food. In a world with endless food delivery app options, Fantuan leans into its cultural competencies with an app now found in more than 40 cities around the world, including New York, London, and Melbourne. As of today, Fantuan has raised at least USD $47 million dollars through Series A and B rounds, as well as an undisclosed Series C round – and is soon eyeing the next.

Born on Burnaby Mountain

The company’s name takes after the Mandarin term for rice ball: fàn tuán / 饭团. Dig deeper, though, and translating each individual character gives rise to the importance of food in Chinese culture. The first character, fàn, 饭, means rice, and in Mandarin, asking “have you eaten rice yet?” /你吃饭了吗 / “ni chī fàn le ma” is a common greeting to determine not only if someone has eaten, but also to say hello to a friend.

Food is a meaningful way of connecting to homelands, particularly for recent immigrants to Canada. Metro Vancouver is notably a hub for the Chinese diaspora, a community that makes up the largest visible minority at 512,260 residents or 20 percent of the total regional population, according to the 2022 census.

Yet for co-founder Randy Wu, it felt like he was stuck at the top of the mountain of SFU’s Burnaby campus before founding Fantuan in 2014. He couldn’t drive, and it was difficult to access cultural foods that he knew were offered in the city. “At the time, we didn’t have [delivery] service,” said Yaofei Feng, his fellow co-founder. “It’s a long delivery distance if you want to order something from Metrotown or Lougheed area,” two local hubs for Chinese food.

Wu wasn’t the only international student facing this problem, and it wasn’t unique to Burnaby. Feng, a Chinese-born student studying in the U.S., was working as a software engineer at Amazon in Seattle. He saw these patterns, too.

In the early- to mid-2010s, China had seen the boom of food delivery apps Meituan and Ele.me. Once international students arrived in North America, they carried these ordering habits along with them — but they were often surprised at how the foods they were looking for weren’t offered on apps like UberEats and Doordash, even though the restaurants existed.

Feng first met Wu through online gaming. But it wasn’t until they started chatting about these similarities between rounds of games that Feng was convinced Metro Vancouver was the right place to build the company. Feng visited Wu in Vancouver, and was sold. “When I entered, especially seeing Richmond — they had so many authentic Chinese restaurants compared with the U.S.,” said Feng. “I thought, ‘Oh, amazing. There’s probably a [big] Asian population and community over there, and we probably have the opportunity.’ So I made my decision to quit my job and join the team to work together with Randy to run Fantuan's business.”

Scaling

“At the beginning, we had a very small delivery volume; only 100 orders around the Burnaby area,” said Feng. But scale happened relatively quickly and the company bootstrapped most of the way through. Two years later, in 2016, it expanded to Toronto. By 2018, the business covered all of the major cities in Canada, and saw the opportunity to raise funding for the first time. “The investor is coming from Silicon Valley,” Feng said, “and we thought –‘Yeah, we probably need to find opportunities in the United States.’ There's a big, big market over there.”

It just so happened that expansion in the United States coincided with the occurrence of the pandemic. While international students were already behaviour-trained to use food delivery apps, said Feng, the pandemic encouraged these opportunities for locals, too. “The city was locked down so you can't go to the restaurant directly, so ordering food was getting popular. People had no choice but to order online, right?”

Fantuan’s growth boomed during the pandemic. With an 843 percent revenue increase between 2018 and 2022, the company was named as one of Deloitte’s Technology Fast 50. Today, Fantuan boasts more than 600 employees and 10,000 delivery drivers around the world, with over 5,000 in B.C. alone.

Notably, Fantuan didn’t secure major investment from any Canadian funds throughout its rounds. Its USD $3 million dollar seed round was led by an American venture capital firm, the USD $12 million dollar Series A was spearheaded by a Chinese venture capital firm, and its USD $35 million dollar Series B was led by another Chinese venture capital firm. Feng attributed it to the conservative nature of Canadian investors in comparison to their American or Chinese counterparts, perhaps amplified by the small population of consumer tech companies in Vancouver.

What makes Fantuan different from other food delivery apps?

One morning last week, I downloaded Fantuan onto my phone for the first time, and the first restaurants recommended to me were a Cantonese dim sum restaurant, a Chinese seafood restaurant, and a poke bar. In contrast, when I opened up SkipTheDishes and UberEats, I was met with a convenience store, Starbucks, and a number of brunch spots.

“Those mainstream competitors, they will probably focus a lot more on the bigger chain restaurants, like Tim Hortons McDonald's,” said Crystal Li, public relations manager at Fantuan. “But for us, we actually have a lot of local mom and pop restaurants. So these are smaller restaurants and they aren’t quite familiar with food delivery or online operations.”

Li emphasized the unique relationships Fantuan’s sales and business development teams have with their restaurant partners. “Some of the restaurant owners are not very good at English. So our business development and sales teams can speak Mandarin or Cantonese or Korean or Japanese. [Our staff] can feel connected with the restaurant owners because [they may share] the same cultural background, I would say.”

This article is a collaboration with Burnaby Beacon. Want to learn more about Fantuan’s cultural importance? You can read the other half of this story here.

“I think the secret for the ethnic food delivery is that you have to use their own language so they feel more connected with the community. I think language is very important here,” said Feng.

Leaning into multicultural advantage for talent

Any local tech company can attest to the shortage of talent – especially when it comes to software development, where workers are often lost to the U.S. for higher wages. But for Fantuan, leaning into its Chinese roots was an asset for outsourcing labour. “We have around 200 employees in China,” said Feng. “They are more focused on the software development, product managing, and also customer service, so they speak Mandarin.”

Nonetheless, Fantuan’s Burnaby office has just over 80 employees. Feng noted that many of these are recent graduates from local universities, with an average age of 27 in the workplace. However, given the macroeconomic climate, some workers had to be transferred to their Chinese office as labour costs are cheaper there — but Feng maintained that layoffs were nowhere near the scale of large tech companies.

Notably, Vancouver has an important advantage over other Canadian cities when it comes to bringing in talent from Mainland China. “We hire a lot of people who are very successful in Chinese mainland tech companies: some big names like Alibaba, TikTok, Meituan,” said Feng. “Once they immigrate to Canada, some of them cannot speak English very well, but Fantuan is a very good environment for them. Our work language uses at least 80 to 90 percent Mandarin.”

What’s ahead for Fantuan

Despite the political backdrop of difficult relations between Canada and China, Fantuan makes a case for what it looks like to straddle both worlds as a private-sector company. Fantuan is one of the first businesses in the region that’s brought about a tech solution as a product of diaspora, and highlighted gaps in the market that likely wouldn’t have been noticed by other populations.

Central to this is Fantuan’s expansion into an English-language app in 2022. “We're a Canadian company: we are not a Chinese company,” said Feng. “The customers we serve, sometimes they don't speak Chinese. Our service is established based on who loves authentic Chinese food, or authentic Asian food [...] We noticed more and more customers love authentic Chinese food, but they cannot read Mandarin or Chinese.”

While this Canadian company has yet to secure major local investment, there’s still a chance to pitch in: Fantuan is currently in active conversations with investors in pursuit of raising a Series D round. The company has been going strong for nine years and continues to grow, eyeing expansion to new countries in Southeast Asia as well as the U.A.E.

This article is a collaboration with Burnaby Beacon. Want to learn about Fantuan’s cultural importance? You can read the other half of this story here.

Editor’s note: This article previously stated that Fantuan has over 5,000 delivery drivers around the world. It has been updated to reflect that the company has over 10,000 delivery drivers globally, with over 5,000 in B.C. alone.