A Chinese overseas company focused on the African food delivery market, has completed a multi-million dollar seed round of financing, led by Y Combinator, Goodwater Capital and Ethiopian angel investor Addis Alemayehou. Chapter 42 has served as a financial advisor.
The newly raised funds in this round will be used for market expansion and technology development: Xiaoman Technology plans to expand its business to Tanzania and Uganda this year; the company will further improve the existing ordering and distribution system and optimize the management system.
It is reported that before this round of financing, Xiaoman Technology has raised 7 million yuan. In January 2022, Xiaoman Technology was selected for the Y Combinator 2022 Winter Incubation Project (YC 2022 Winter Batch).
The main business of Xiaoman Technology is beU, a localized life service platform for the African market. From June 2021, it will start a takeaway business in Ethiopia. Founder Zheng Hao said that as of December 31, 2021, beU’s market share has reached 56.2%, making it the first in the local market. In February 2022, 8 months after the business started, beU’s market share has surpassed the second (formerly first) Deliver Addis by 20%.
Zheng Hao summed up beU’s competitive advantages in three points: First, the market structure advantage of low penetration rate in Africa greatly helped beU to successfully explore in Ethiopia. Second, beU delivers faster than competitors such as Zmall, Deliver Addis, and Uber Eats, and typically takes half as long to deliver.
Finally, in terms of ordering, in order to facilitate the ordering of meals for users in areas without internet, beU has adopted a variety of ordering channels, including telephone, official website and app, to ensure smooth ordering regardless of whether there is an internet connection or not.
Talking about the future development plan, Zheng Hao told 36氪that Xiaoman Technology (beU LTD) plans to start the A round of financing early next year, and plans to raise about 12 million US dollars. In terms of market layout, the company plans to deploy the Uganda and Tanzania markets this year, and enter 10 African countries early next year. At the same time, in terms of business development, beU will start to try supermarkets and drug delivery at the end of this year. In the future, it will also try services such as hotel/homestay reservations, and 30-minute delivery of any product. In the end, beU will become a super service covering a number of O2O services. application.
Y Combinator, the lead investor in this round of Xiaoman Technology, said: “Africa is the region with the fastest growth in venture capital in the world. In 2021, Africa will receive US$5.2 billion in venture capital, which is the sum of the past seven years. We are very optimistic that the beU team will take root. The local pioneering spirit also believes that with the large-scale expansion of the Internet economy in Africa in the future, beU delivery will develop better and better.”
