This week, we announced one of our most exciting deals yet: we led the $20m Series C for Hong-Kong-based lifestyle cooking platform and brand DayDayCook.
While the company is our first venture in Asia, we’ve had our eye on the market for some time. The Asian market — and the Chinese market specifically — is well ahead of the Western world in many ways; particularly when it comes the adoption of social and mobile commerce. Seeing the innovation breeding in China is, in some ways, like taking a peek into our future.
Founded in 2012, DayDayCook originally set out to be the go-to destination for online cooking and recipe videos in China. Amidst the rise of mobile internet technology and food delivery apps, city dwellers in China spend increasingly less time cooking and eating at home compared to previous generations. In fact, many young people can’t really cook at all. Quick to spot this trend was Norma Chu, a Hong Kong-born financial-analyst-turned-entrepreneur, who quickly established DayDayCook with the mission to encourage young people to learn and enjoy cooking.
Nowadays, though, DayDayCook’s platform attracts users from all age groups, seeing on average 475 million views per month. The agility of the company has constantly impressed us: the team had to swiftly ramp up its operations to cater for the sharp increase in active users on DayDayCook earlier this year, which actually almost tripled in the first quarter in the wake of the coronavirus outbreak. Active monthly users were up 52 per cent in March compared to January, while community post users also increased by 50 per cent in the same period as more people became keen to explore new foods and recipes. Considering the likelihood that more people will choose to stay at home in the longer term as a result of COVID-19, it’s clear that the Chinese home cooking revolution is here to stay.
But DayDayCook is so much more than an online cooking platform. The company — which now employs over 300 people — is also building a powerful platform for lifestyle and consumer brand advertisers, and, critically, a retail channel through which it sells its ingredients and equipment to users. This is what made it such a compelling investment opportunity: the e-commerce strand of the business now represents 80 percent of its revenues, with the content they produce essentially acting as a shop window. Given that China’s consumer products market is one of the largest in the world (retail sales reached $6.2 trillion in 2018), and continues to grow year on year, DayDayCook is capitalising on a huge market. We saw how powerful a content to commerce strategy can be from our investment in Threads Styling, a company that allows its customers to find and buy luxury clothing apparel solely through the use of social media platforms such as Instagram and Snapchat: with the commerce and checkout all happening via a chat-based platform.
To complete DayDayCook’s omnichannel strategy, the company has four bricks and mortar experience stores to support the online brand. These stores are located in malls in both China and Hong Kong, selling small appliances, utensils and food items; they’re also used to host workshops and cookery courses. DayDayCook’s integration of offline and online business is genius. Scaling hybrid companies like this are rare on the ground in both Europe and the US, but it’s a business model that we’re familiar with and can be hugely effective when executed well. We saw this strategy work well with our portfolio company Pirate Studios, which combines a platform business and a media publishing and content business with a more traditional property company, providing space to bands and DJs to rehearse and produce music.
Ultimately, the decision to back DayDayCook was decided by the determination and drive of its founder, Norma Chu. She’s one of the most focused, determined and ambitious founders that we’ve come across — she’s a founder that inspires confidence and that you know will be able to combat whatever comes her way. Needless to say, we were thrilled to be able to back Norma and support DayDayCook’s in their journey to build the healthy, home-cooked world that they’re creating.
