Yum China plans to buy Chinese food delivery app Daojia for $200 million

Yum China plans to buy Chinese food delivery app Daojia for $200 million
Company Overview

Based in Beijing, Daojia was established as a web and mobile based  “one-stop-meal service” platform for users across China. Since inception, Daojia has evolved from a meal-service platform to a sophisticated online-to-offline (O2O) platform, that can easily integrate with food and non-food service providers. Daojia’s self-built distribution logistics system is currently integrated with over 6,000 restaurants. To date, these restaurants have served upwards of 100 million customers across Beijing, Shanghai, Shenzhen, Guangzhou and other major cities in China.

Estimated Revenue

Daojia has an estimated revenue of $20.2 million. It has participated in 2 rounds of funding, has a total equity funding of $67 million. Its most recent funding of $50 million took place in 2014.

CEO

Hao Sun is the founder and CEO of Daojia. Previously, Sun worked as the CEO of Lihua Fast Food and a Senior Vice President of Hurray, an online media company.

Why Bother?

More than just a food-delivery app, Daojia is transforming the O2O service industry in China, through extending its platform to small business owners across different segments of the industry. Its pioneering platform recently gained the attention of Yum China, a multinational fast-food giant currently operating nearly 3000 restaurants across 400 cities in China.

The novelty of Daojia, is in its democratizing effects on the O2O service platform by onboarding small busines owners.

Initially serving as a “one-stop-meal service” platform, over the years, Daojia has simultaneously been improving its distribution logistics system, in order to directly integrate with restaurants and other small business owners within the O2O lanscape.

For small business users, Daojia’s self-built distribution logistics system serves as a customized platform that directly connects with existing and potential customers, saving them the hassle of building an in-house app.

In addition to restaurants, the startup recently extended offerings to licensed chefs, who can now use the its platform to connect with a large base of users from the high-end dining and public catering segments.

Within the restaurant landscape, Daojia is disrupting the traditional restaurant model by democratizing the entire food ecological chain, through extending its O2O platform to licensed chefs. Chefs can now use Daojia’s platform to connect with a large base of users from the high-end dining and public catering segments.

Disrupting the O2O service landscape, Daojia’s self-built distribution logistics system was featured on the 2014 list of China’s Top 50 Greatest Investment Value under “Best Logistics Systems.”

The company is also gaining recognition internationally.

Yum China, a recent spinoff off from the US-based fast food giant Yum Brands Inc., is said to have plans of snatching up Daojia for up to $200 million.

Currently, Yum China operates approximately 1100 KFC restaurants and 1,600 Pizza Hut restaurants across 400 cities in China.

With plans to expand its food-delivery segment in China, the multi-national giant thinks that Daojia is up to the task. Having served over 100 million customers across China’s major cities, it just might be.