China restaurant industry supplier gets $14m Series A
China-based Zuodashi, which provides digital solutions and food accompaniments to restaurant delivery businesses, has raised RMB100 million ($14 million) in Series A round led by Hua Gai Capital.
Other participants include We Capital, Yaochang Chen, the former CEO of Walmart China and currently a partner at Gaorong Capital. Gaorong backed the company's angel round in January together with DL Capital and has also re-upped in the new round. Chen participated as an individual investor.
Established in November 2018, Zuodashi specializes in the production and sale of food accompaniments, usually flavored seasonings, snacks or vegetables that are offered alongside main dishes. The company now has six accompaniment products, each priced at RMB0.5 to RMB1, which are sold in bulk to restaurants.
The business also offers a software-as-a-service (SaaS) platform that helps restaurants manage food delivery channels, do data analysis, and set up automatic reply to users' comments. The SaaS service is provided to clients for free at the moment, while the food accompaniment business generated RMB1 million in revenue in January. Zuodashi claims this figure is growing 200% a month.
More than 400 restaurant chains at some 30,000 outlets across China are said to have used the service since inception. The management team includes Zhenhua Dai, a former vice president at Ele.me, a Chinese food delivery platform under Alibaba Group.
"Food delivery business in China has been expanding at a rapid speed but there is still huge upside for companies to grow in this segment. Food accompaniments are a good category for start-ups that want to have a breakthrough in this space," said Chen.
A number of restaurant services platform have emerged in recent years, driven by projections that China's dining industry will be worth RMB5 trillion by 2020. They include Candao, which raised RMB100 million in a Series A led by Hong Kong-based Gaw Capital Partners and Beyond Ventures in April and Shihen Technology, which raised the second tranche of a Series B led by a TPG Capital and SoftBank Ventures Korea fund in February.
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