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Junzi Kitchen pulls in $5M, puts a new spin on Chinese food

Sarah A. Smith
Segment Producer/Booker

One startup is giving Chinese take-out a makeover — packing the fast foot favorite with innovative flavors mixed with tradition

Junzi Kitchen, a modern fast-casual Chinese chain, is on a mission to upgrade the pallets of customers, while challenging chains like Panda Express and P.F. Chang’s.

The Chinese food market has a massive customer base in America, with over 46,000 restaurants. Despite a strong fan base, Junzi’s data found that less than 5-percent of those units are branded chains.

“In the past 30 years a lot of Chinese immigrants came to America, but without the necessary sources and support to start a big brand,” Junzi Kitchen’s co-founder and CEO Yong Zhao told Yahoo Finance this week.

junzi Kitchen

Founded in 2015, junzi Kitchen opened its first location in New Haven, where its three co-founders — then students at Yale University— collaborated on the idea for the restaurant chain.

Zhao said the inspiration came from the lack of authentic Chinese food options available near campus.

“It was very hard to find something very convenient but also healthy and authentic as we had back in China,” Zhao told Yahoo Finance.

The team wanted customers to be able to see that the food was fresh, which impacted the restaurants layout. “We looked at a lot of open formats such as fast casual formats, like assembly lines, so we can display the food in front of you,” he added.

Once they decided how they wanted to display the food, the team focused on the dishes to represent “the best flavor from China,” according to Zhao.

In creating the menu, junzi Kitchen has aimed to bring high-quality ingredients and traditional flavors in an effort to make them accessible to everyone.

Recently, the restaurant chain closed a $5 million pre-Series A financing round. Junzi has also secured a partnership with Zuul Kitchens to meet demand for its delivery services, as its clientele continues to grow.

The booming quick service restaurant industry in the United States generated a revenue of $256 billion in 2018, according to data from Statista. Fast casual restaurants have become more mainstream than ever — but Chinese fare is largely absent from that equation.

The majority of Chinese food eateries are individually owned “mom and pop” restaurants, according to Zhao — but they are not holding up in the U.S. According to the company’s market research, about 10% of Chinese restaurants in the U.S. closed in 2018.

“Last year was the first year Chinese restaurants in America declined because of retirement and the young kids don’t want to take over,” Zhao told YFi PM.

Sarah Smith is a Segment Producer/Booker at Yahoo Finance. Follow her on Twitter @sarahasmith

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