Third-party delivery service Chowbus snags $4M in funding
- Chowbus, a food platform that connects diners with authentic Asian food from independent restaurants, secured $4 million in funding led by Greycroft Partners and FJ Labs, according to a company release shared with Restaurant Dive.
- Consumers can use Chowbus' mobile app to order food for pickup and delivery, or through Chowbus Shuttle, which delivers meals via efficient routes. Chowbus also provides participating restaurants with marketing, technology and logistical support, and helps companies develop eye-catching, photo-heavy digital menus to entice users on its mobile app.
- Chowbus has reportedly experienced a 300% year-over-year revenue growth rate, and predicts that this new funding will support expansion in up to 20 new markets in 2019. The platform is currently available in New York City, Philadelphia, Chicago, Boston and Champaign, Illinois.
The third-party food delivery market grows fiercer by the day, but it seems there is still room for platforms focused on niche cuisines and independent players to blossom.
The phenomenon makes sense. According to Chowbus, only 15% of mom-and-pop eateries — which represent a $346 billion market — are listed on Grubhub and Uber Eats, despite growing consumer demand for authentic cuisine. And while a barrier to entry for many users of the big players like DoorDash and Postmates is the hefty delivery fees, Chowbus gives consumers the option of using Chowbus Shuttle, which delivers lunch for only $1.
What's unclear is how much the service charges participating restaurants. Major third-party delivery services are notorious for taking as much as 30% off the top of their partner restaurants' sales — a fee that can hurt local chains that are trying to grow their brand presence. Even if Chowbus charges similar rates, however, it gives small businesses access to a digital platform and marketing expertise — assets that are crucial in today's internet and mobile-driven restaurant marketplace.
Slice, the delivery platform that partners with independent pizzerias, operates from a similar platform to help companies that are behind the technology curve catch up. The company recently partnered with TripAdvisor, allowing diners to order from the almost 11,000 independent pizza chains in Slice's portfolio through TripAdvisor's website.
"Digital is not a 'nice to have' anymore," Slice CEO Ilir Sela told Skift Table. "It is a must have. Pizzerias need to shift to digital if they are going to success long term."
The same could be said for restaurants of all genres, and tapping into the burgeoning $18 million food delivery market could help small brands capture consumers they normally wouldn't have access to. The marketplace is predicted to grow 7.3% annually to $24 billion by 2023, and though delivery made through third-party players make up only about $2 billion of these sales, the model can level the playing field between upstart restaurants and their deep-pocketed, mainstream competitors.
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