Food delivery applications have experienced significant growth this year, benefiting both consumers limited to their homes and investors seeking opportunities in this expanding market.

The latest development in this area involves HungryPanda, an app designed with a Mandarin-language interface specifically for Chinese consumers living abroad. The company has recently secured $70 million in funding to facilitate its continued international expansion, focusing on the delivery of food from Chinese restaurants and Asian grocery stores to the Chinese diaspora.

Current estimates suggest that approximately 50 million people of Chinese descent reside outside of Mainland China, Taiwan, Hong Kong, and Macau, with a large concentration in other Asian countries. This demographic represents a key target market for the startup. Looking ahead, the potential customer base expands to include tens of millions more individuals from subsequent generations, which may necessitate adjustments to the app, including the addition of other language options.

This funding round follows a substantial increase in HungryPanda’s user base. The app is now operational in 47 cities – an increase from 31 in February – across Australia, Canada, France, New Zealand, and the United Kingdom, where the company originated. Having grown thirtyfold over the past three years, HungryPanda’s CEO and founder, Eric Liu, stated in an interview that the company is already profitable in its initial markets, such as the U.K. and New York City, and is on track to achieve profitability in other locations as well.

The Series C funding round is led by Kinnevik, a prominent investor in e-commerce startups, with participation from 83North and Felix Capital – both of which previously invested in HungryPanda’s $20 million funding round earlier this year – alongside Piton Capital and Burda Principal Investment.

HungryPanda has not disclosed its current valuation. However, it is noteworthy that the company has largely operated on a bootstrapped basis throughout its four-year history, having raised a total of only $90 million to date, all within the current year.

The year 2020 has seen a surge in the popularity of food delivery apps. These services, already favored by consumers for their convenience in ordering food via phone or website, were often overwhelmed during the COVID-19 pandemic as people were required to stay home and restaurants were forced to close.

E-marketer estimates a usage increase of over 25% in the U.S. alone. However, this growth came with increased costs, such as those associated with implementing social distancing measures, which often strained companies’ unit economics.

Despite the crowded market, many food delivery apps lack distinct branding. For instance, in the U.K., the delivery bags and logos of competitors Deliveroo and Uber Eats were at one point indistinguishable.

HungryPanda differentiates itself significantly from these competitors. The app is entirely in Mandarin, and it primarily focuses on Chinese cuisine. Customers seeking pizza, burgers, or English-language menus should look elsewhere.

The app was created four years ago by Liu, an international computer science student at the University of Nottingham. Having moved from China, he and fellow Chinese students encountered difficulties ordering from local Chinese restaurants.

The challenges stemmed from English-only menus with dish names that lacked meaning for them, and the fact that dishes were often modified to suit local tastes. Liu explained that Chinese people prefer authentic, “traditional” food and place a high value on the dining experience.

His solution was to develop an app that provided information in a format accessible to students like himself, including items typically offered only to Chinese customers in Mandarin, if offered at all.

While food delivery unit economics can be challenging in large cities, HungryPanda benefits from a different dynamic. Companies like Deliveroo typically aim for slightly more than two deliveries per hour per driver to achieve profitability. However, HungryPanda primarily delivers to students in dormitories who often order in groups for “family style” meals.

According to Antoine Nussenbaum, co-founder of Felix Capital, this approach mitigates many of the typical unit economic challenges.

“This resulted in a much higher delivery efficiency,” he added.

The same advantage applies to grocery delivery. Panwen Chen, HungryPanda’s global VP of strategy and an early employee, also a student at Nottingham, explained that even when students didn’t want to eat out, obtaining groceries was difficult.

“I didn’t own a car, so reaching the Chinese grocery store in Nottingham required taking two buses or a 50-60 minute walk,” he said. “Carrying heavy bags of groceries was a struggle. We then expanded into groceries, leveraging our existing food delivery infrastructure and understanding of the community’s needs.”

He noted that takeaway ready-made food remains the startup’s primary source of revenue, and continues to grow rapidly.

The addition of both food and grocery delivery functions positions HungryPanda for future growth, mirroring the evolution of “super apps” in Asia, such as WeChat and Grab, which offer a wide range of services beyond their original core function.

Consumers and businesses in Asia are accustomed to these “super apps” and utilize them extensively. This gives HungryPanda, as a U.K.-based app, a unique advantage, potentially as a partner or competitor in markets where Chinese apps have faced challenges in international expansion.

The company already promotes a variety of offers from partner organizations to its users, extending beyond basic food ordering.

Liu initially started HungryPanda as a side project during his university studies, intending to pursue postgraduate work at the London School of Economics after completing his undergraduate degree at Nottingham. However, the business’s success led him to defer his studies for two years. Last year, he received a reminder from the LSE regarding his application, and ultimately decided to defer indefinitely.

“I believe it has been a valuable experience not only for me but also for the Chinese community that uses our services,” he said. He currently resides in New York City, focusing on expanding the business in the U.S.