TPG-SoftBank fund backs Chinese restaurant services platform
Shiheng Technology, a Chinese company that helps restaurants manage their online food delivery businesses, has completed the second tranche of a Series B round led by a TPG Capital and SoftBank Ventures Korea fund.
The fresh funding - said to be tens of millions of dollars - will be used to build market share, hire more staff, and conduct more detailed customer research, according to a statement. The company also wants to find ways to help restaurant customers work with more suppliers and reduce costs.
This is Shiheng's third round of funding in 12 months. Previous backers include Sequoia Capital China, Gaorong Capital, and Vision Capital. The TPG-SoftBank fund was established late last year with a $300 million corpus to be deployed in early-stage China deals. It is managed by members of TPG’s growth investment team.
Founded in 2017, Shiheng offers services through which restaurants can make better use of existing online food-ordering platforms like Alibaba Group-owned Ele.me and Meituan-Dianping. These services include devising promotions, showcasing menus, launching advertising campaigns, product development and customer analysis.
The company has a big-data powered platform that absorbs and analyzes data from restaurants in real time and helps them make corresponding adjustments. It also analyzes data from daily operations with a view to delivering efficiency improvements.
Shiheng claims to have worked with more than 10,000 outlets under 300 restaurant brands across China. Clients range from Starbucks to regional restaurant brands such as Qian Da Ma. “Small and medium-sized restaurant chains are still the major players in China’s dining market. Going forward, big chains will account for around 5-10% of our customer base with the rest being smaller clients,” said Shihun Fang, CEO of Shiheng.
Online food delivery services in China attracted 300 million users in 2017, according to iiMedia Research. The space is dominated by Meituan-Dianping and Ele.me, which had market shares of around 59% and 36%, respectively, as of June 2018, according to data monitoring firm Trustdata.
Shiheng’s major rivals include Shangyou, which raised a pre-Series A round led by Meridian Capital China last year, as well as Zhangdan and Zaihui, both of which are backed by DCM.
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