May 25, 2017

Delivery Service Food2U Secures Funds for Expansion Into Mandalay, Napyitaw

Yangon-based food delivery service Food2U has se­cured a six-figure invest­ment from four local in­vestors as the company eyes expansion into Man­dalay and Napyitaw.

Part of the investment will go towards develop­ing the company's back-end system which handles the automation of food ordering, invoicing and monitoring deliveries, Nay Min Thu, one of the investors told Myanmar Business Today.

This latest investment brings the total value of the company to $1.5 mil­lion, he said.

After seeing month-on-month growth of 15 to 20 percent since Food2U launched in Yangon in 2015, Nay Min Thu, founder of online retail portal iMyanmar Group, says demand in other ar­eas of the country is also strong.

“We are taking to res­taurants in Mandalay, we've already spoken to about a dozen… and they are quite keen to join the platform.”

“The business model we'll use in Mandalay will be different to the one in Yangon, because in Man­dalay some restaurants already have their own delivery service so we'll just provide the system for ordering,” he said.

Expansion into the na­tion's sparsely populated capital will see Food2U will take on yet a different model to Mandalay and Yangon, with “retirees” and “rich people” becom­ing the service's target consumer.

Initially, Food2U will hire five to ten staff in Mandalay and Napyi­taw to handle the expan­sion while the company predicts a more modest growth rate of between five and 10 percent month-on-month.

Catering to a mainly local customer base, Food2U has so far struck partnerships with 120 restaurants in Yangon and makes over 5,000 de­liveries per month while this fiscal year Food2U is predicted to generate about $750,000 revenue, said Nay Min Thu.

Despite fierce compe­tition from main rival Yangon Door2Door, My­anmar's developing food delivery culture means there's ample opportu­nity to grow, says Nay Min Thu, who predicts the nascent sector will be generating “tens of mil­lions” of dollars in rev­enue within a few years.

“Compared to our com­petitor Yangon Door­2Door we cater more to the local crowd rather than the expatriate mar­ket so we feel it will get bigger every year.”

Source: Myanmar Business Today