Exclusive: How Fantuan built a niche product that's become North America's largest Asian food delivery platform

Fantuan, the food delivery-turned-life services platform, has come a long way since being founded in Burnaby in 2014. To date, the company operates in four countries, has two million registered accounts, and has raised over USD $90 million from investors, including Alibaba co-founder Eddie Wu.

As Fantuan prepares to celebrate its 10th anniversary, the company will take the stage at INNOVATEWest to share its story: from one founder dropping out of SFU and the other quitting Amazon to repeatedly getting told ‘no’ by restaurants until returning several times and doing deliveries themselves, to now offering the largest selection of Asian food with support from over 600 employees, 75,000 merchants, and 80,000 drivers.

In hopes of encouraging more immigrant, minority, and young entrepreneurs to seize opportunities and dream big, Fantuan’s co-founder, Yaofei Feng chatted with us about his journey in joining the company and building the MVP, insights and tips for others wanting to build a niche product, and why people should rethink what innovation is.

Homesick student to entrepreneur

A decade ago, Fantuan co-founder Randy Wu was studying economics at SFU when he got sick and craved food from back home in Hunan, China.

Being on campus atop Burnaby Mountain, Wu felt ‘stuck’ as there were few options for authentic Chinese food available. He also didn’t have a car and wasn’t familiar with restaurants outside of campus. The frustration got Wu thinking about the need for a Chinese food delivery service.

At the time, Skip the Dishes and Uber Eats had just launched. Meanwhile, back in China, there was already a boom of food delivery apps like Meituan that got their start delivering to students in dorms. Between 2013 and 2014 alone, the market had grown from nearly USD $8 billion to $13.5 billion.

Impressed by Meituan’s success, Wu decided to create his own food delivery app after his girlfriend convinced him to start before missing the opportunity. 

Wu started by doing everything manually. He, and later, Feng, went to talk to restaurant owners themselves about the idea. Many didn't want to get involved until the two went back for the fourth or fifth time. Some only agreed to sign up because the duo were young entrepreneurs — encouraging Wu to return to school after the business failed. 

Leaving Amazon to risk it all

Feng first met Wu online a year before, playing the multiplayer game Dota 2. 

Feng lived in Seattle and worked as an engineer at Amazon. Having moved to the U.S. from Zhejiang for school, he lived a life many international students dream of. Yet, Feng found himself wanting more.

While it’s standard for engineers to code based on what a product manager says the customer needs are, Feng wished he could talk to the customer directly to solve their problem and get feedback.

So when he learned about Wu’s food delivery service and saw the many authentic Chinese restaurants in Vancouver, it wasn’t a ‘hard decision’ for him to quit Amazon and partner with Wu — who then dropped out of SFU months before graduating without telling his parents. Both used up their personal savings to build Fantuan.

“When you're young, you have to try something different,” shared Feng. "You don't have a lot of wealth. You have nothing to lose,” emphasizing that it’s also worth taking risks when you have less responsibility, like having to take care of a family like he does now.

Leveraging WeChat for the MVP

Once restaurant owners agreed to work with Wu and Feng, the duo would put up a flyer. It informed customers that they could request delivery through subscribing to Fantuan’s WeChat official account. After customers request an order, Wu and Feng would place and deliver the food themselves.

WeChat provided an easy and affordable way for Fantuan to build its MVP. By then, WeChat allowed for peer-to-peer and in-app transactions and the option to pay at stores through QR codes. WeChat also made it simple for small and large businesses to set up storefronts and acquire customers as it offered CRM and marketing features.

“A lot of people are needed to maintain an app but at the beginning, how can you afford that, right?” shared Feng. “Once you prove the business model works, you can think about better customer experiences [and] build your app.”

It wasn’t long until more restaurant owners opened up to the idea of Fantuan as a way to earn more as customers expressed interest in delivery. 

Expanding quickly into a life services platform

By 2016, Fantuan became the top Chinese food delivery service in Vancouver, achieved net profitability, and expanded to Toronto. 

Two years later, the company launched in other Canadian cities before raising its seed round for an undisclosed amount. Then, Fantuan expanded to the U.S. and was quick to prepare for the COVID-19 pandemic ahead of competitors — even being the first to offer ‘contactless delivery.’

By 2020, Fantuan became a life services platform as customers could have drivers deliver goods or run errands for them. That same year, Fantuan raised USD $12 million from its series A round and launched the English version of its app. The company then raised USD $35 million in its series B round, expanded to the U.K. and Australia, and onboarded a diverse range of restaurants over the next two years.

Then, between 2023 and now, Fantuan raised USD $40 million in its series C round and was listed on Deloitte’s ‘Enterprise-Industry Leaders’ list — boasting an over 500 per cent three-year revenue growth rate. Fantuan also acquired the food delivery line from Chowbus, an all-in-one restaurant POS system.

Key drivers of growth

Fantuan credits its early growth toward making restaurant owners, customers, and drivers happy. 

Employees visit owners frequently to ask what they need and provide support, such as offering business tips and advice and the option to set up online coupons for in-store deals, ads, and promotions — even having them designed. More recently, Fantuan also provides supply chain services so that owners can purchase ingredients or containers for better prices.

Employees also plot delivery routes so customers receive orders on time and drivers can take multiple orders at once to earn more. Fantuan also continues to focus on improving its delivery algorithm and system to maintain efficiency.

Focusing on different areas at different stages of the business was also pivotal to Fantuan’s growth.

“At the very beginning, you need to figure out what the business model is and make a profit,” Feng explained. “But once the company's growing, you need to think about the strategy like which location you need to go into and whether you need to raise funds. Then once you have over 100 people, you need to think about how you organize and manage the organization, right?”

Feng admits that as Fantuan transitioned into a life services platform, the company tried many ideas that didn’t work out. 

“When you want your product to be more competitive in the market, you have to do a lot of analysis and develop functionality to encourage your customer to place more orders,” Feng shared. “That's probably the biggest factor in terms of what's going to keep them returning to the app.”

What approach fostered success

Reflecting on what approach laid Fantuan’s success as a niche product, Feng highlighted having a deep understanding of the ‘entire environment’ and drawing on a business model that already works elsewhere.

“It’s not just copy-and-paste; you have to change a lot of things,” Feng added, an example being solving for restaurants that only accept cash. “Even if the business model exists, we have to localize it, right? [...] People should be rethinking what innovation is.”

According to Scott Berkun, widely known as the author of The Myths of Innovation, the best definition of what innovation comes down to is: “Significant positive change. It’s a result. It’s an outcome.”

To Feng, what makes Fantuan one of the most innovative food delivery-turned-life services platforms in North America is efficiency:

“Efficient operation is part of Fantuan’s DNA.”