The (New) Story of ChowBus

What would you do if your startup experienced rocketship growth, raised nearly $70 million, hired hundreds of people… and then flatlined?

ChowBus was on track to become the next unicorn food delivery business, on par with GrubHub and DoorDash. It specialized in Asian cuisine from immigrant-owned restaurants that typically weren’t on other delivery platforms. Their plan was to expand to other ethnic cuisines and win by staying truest to each respective culture.

After growing 700% year-over-year during the Covid pandemic, they raised over $65M between 2020-2022 to scale the delivery business.

Just when everything seemed to be going their way, growth stalled.

Covid restrictions lifted and lowered demand for delivery. The ChowBus team couldn’t replicate the magic they had with Asian restaurants across other cuisines.

They seemed to reach a ceiling that was impossible to overcome unless they did something drastic… So that’s what ChowBus’s founder Linxin Wen and Suya Zhang did.

They executed the rare and incredibly difficult scaled pivot.

They built a new POS business alongside a sizeable delivery business that they had built for over 5 years. For over a year, Linxin essentially ran two companies simultaneously.

Eventually, ChowBus sold the delivery business and went all in on POS. They have now have processed over $4B in payments for restaurants and the startup is growing rapidly again.

And just yesterday, Chowbus announced a new funding round of $81 million.

As one of the first Angel check into ChowBus, I’ve worked closely with Linxin and Suyu for nearly 10 years, and especially Linxin, the CEO.

I caught up with Linxin at ChowBus’s downtown Chicago offices recently to talk about ChowBus’s early rocketship growth, the crash, the scaled pivot, and their second chance at building a unicorn.

Below is a summary of our conversation:

Eddie: What was the motivation for building ChowBus in the first place?

Linxin: “Well, at first we just wanted to order lunch. The initial idea was just to have people pre-order their lunch so we can deliver everything to office building or university campus for just a $1 delivery fee.

We found out about the struggle of running restaurants, especially the immigrants restaurants. They are great at cooking but really struggle with everything else like, technology and marketing. So we wanted to build something for them.”

Eddie: How long did you bootstrap before raising institutional capital?

Linxin: “We bootstrapped for two or three years. My first check was back in 2014-15. A restaurant owner, Vincent, he gave me 50K to start. I used the money to build a website.”

Eddie: When did you feel like you had real product-market fit?

Linxin: “We found product-market fit early. People were ordering, we did not need to spend on marketing or ads, and users referred each other. We expanded to a few other cities.

Eddie: In the early days, why did some investors say no?

Linxin: “Some investors thought the TAM was too limited: a delivery platform serving primarily Asian restaurants. And I was a first-time founder without experience scaling a business.”

Eddie: How did you bring on your co-founder? Why was Suya the right pick?

Linxin: “Suyu was an early adopter. He was a power user who ordered from us every day, and I personally delivered the food to him. He built the entire mobile app. He’s scrappy, loves building, and he had great product taste.”

Eddie’s Note:

I wanted to invest in ChowBus because as a Chinese-American, I cared about the mission of supporting Chinese restaurants and their customers. I also believed in Linxin and Suyu who had already bootstrapped for 2-3 years and profitably launched in Chicago without funding.

The TAM was a secondary concern, but I believed they could replicate the model for different ethnic cuisines.

Eddie: When did the explosive growth really start

Linxin: When COVID hit, [the business] really started working. We were profitable in several cities like Boston, Philadelphia, New York City, and Silicon Valley.”

Cities where we had dense communities, word of mouth, and delivery demand. The expansion worked well, and we maintain good unit economics in every city we operated in.”

Eddie: What did you learn about scaling the team?

Linxin: “The most important lesson is to be clear about your culture and hire people who fit it. At one point, investors pushed us to hire ‘people who have been there,’ so we hired leaders from big companies like Uber and Amazon.

They had experience, but many did not want to be hands-on. They focused on internal process instead of the customer, hired more people to solve problems, and our burn rate went up. The business became really inefficient.”

Eddie: What were the hardest expansion lessons?

Linxin: “Los Angeles was hard for us because it’s too spread out. Chowbus started…doing delivery to all kinds of people anywhere, but we could no longer do a shuttle service. We had to do exactly what Uber Eats and DoorDash did.

At the end of the day, we just didn’t have the size. We didn’t have enough power users buying.”

Eddie: In 2024 you sold the delivery business and went all in on POS. Walk me through that movement.

Linxin: “I traveled across the country, talked to employees, and talked to restaurant owners to find out what they really wanted… I believed we should never lose the touch with a customer, no matter how big we are.

I knew we had deep relationships with Chinese restaurant owners and unique capabilities, like Chinese language support, that bigger players like Toast couldn't replicate. But we couldn’t differentiate from the big delivery players.

Delivery is sometimes a necessary evil. We would need to increase the commission or asking them to do more discounts to make it work. It’s not necessarily good for the restaurant.”

With POS, we just build the tools to help the restaurant run their operation more efficiently, do marketing, do loyalty, and CRM.”

Eddie: Why is the TAM larger in POS than delivery?

Linxin: “Delivery was limited by density and by how many people we could realistically serve. But for POS, there are about 122,000 Asian restaurants in the United States. Toast is a $20–$30B business with around 120,000 restaurants on the platform.

If we can serve even 50% of Asian restaurants, we can build a very large business.”

Eddie: What make the scaled pivot so challenging?

Linxin: “Pivoting at our scale was incredibly hard. It was a rough period. We had to rebuild the team because we were moving from B2C to B2B, and the skill sets are very different.”

Eddie: How drastic was it, really?

Linxin: “Less than 10%—maybe 5%—of the employees from the delivery era are still at the company.”

Eddie: What stayed the same?

Linxin: “The mission stayed the same. In fact, the POS business is even more aligned with it. Delivery can become a ‘necessary evil’—pushing commission or discounts that aren’t always good for restaurants. With POS, we’re building tools to help restaurants run more efficiently, and do marketing, loyalty, and CRM.”

Eddie: If you could do it again, what would you do differently?

Linxin: “I would spend more time making sure we are working on the right things and moving in the right direction. And I would spend more time hiring the right people. No matter how big we are, we also have to stay close to customers and talk to employees and restaurant owners, so we never lose touch with what they actually need.”

Eddie: How has your approach changed the second time around?

Linxin: “Sometimes working smart is even more important than working hard. You still have to work hard, but you have to be moving in the right direction. The second time around, I spend more time hiring the right people. We narrowed our core values to ‘humble to serve,’ ‘own and take initiative,’ and ‘do the right thing,’ and we use those values to guide hiring, promotions, and firing.”

Eddie: How do you think about founder vs CEO now?

Linxin: “As a founder, you focus on finding product-market fit, launching the product, and getting traction. As a CEO, you focus more on hiring, fundraising, strategy, and managing board relationships. I still see myself as a builder. The difference is that now I build with a larger team, instead of doing everything myself.”

The ChowBus story highlights a few critical attributes of a successful startup:

The ChowBus story is not done. They are successfully post-pivot and growing rapidly. They recently passed $4B in transactions on their POS platform.

I’m excited to see what Linxin, Suyu and their team do next. Knowing where they’ve been, I would bet on them again and again.