Newsletter Signup
Join Our Community!
Stay updated with the latest news, exclusive insights, and more.
Stay updated with the latest news, exclusive insights, and more.
To see how we may use your information, take a look at our privacy policy.
.jpg)
In Kyoto, a startup company called ”funfo” is providing mobile ordering systems for restaurants. Founders Mr. Qiao and Mr. Wang started the company with four other members during their graduate studies, driven by a desire to support digital transformation in the restaurant industry. Currently implemented in about 6,000 restaurants nationwide, their integrated POS system offers a one-stop solution, making digital transformation accessible particularly for small and medium-sized restaurants.
Could you introduce yourselves and tell us about your backgrounds?
I'm Qiao from funfo Corporation, and I've been in Japan for 12 years now. After high school, I came to Japan to study Japanese and attend university and graduate school in Kansai. During my second year of graduate school, I established the company with a startup visa from Kyoto Prefecture. We're now in our fifth year as a company, fourth year of open business operations.
I'm Wang Yuanyuan from funfo Corporation. My mother frequently traveled to Japan for work and loved it. Having distant relatives already studying in Japan made me want to experience it for myself . Like Qiao, I joined as a Co-Founder during our second year of graduate school and have been fully committed to the company since then.
Did you initially plan to start a business in Japan?
I didn't specifically plan to start a business in Japan. I was interested in Japanese subculture and initially just wanted to learn Japanese to play games. During university, I planned to join a large Japanese company, but entrepreneurship education sparked my interest in starting my own business. The economic conditions were favorable around 2015-17, with many unicorn companies emerging, which seemed appealing.
Although I initially job hunted in Japan, I ultimately decided to start my own company.
Was mobile ordering your initial business plan?
Yes, our business hasn't changed since founding it. At that time, even McDonald's didn't have mobile ordering, and there were almost no mobile ordering companies in Japan. We started by explaining what mobile ordering was.
Mobile ordering was already widespread in China compared to Japan. However, its adoption in other countries, including Japan, was limited. The pandemic has since created tailwinds for the mobile ordering market.
Could you tell us about your business and early days?
We provide 'funfo,' a mobile ordering system for restaurants that integrates in-store self-ordering, POS registers, and data analysis systems. Our service has two main features: easy implementation through modularization, and specialized restaurant data analysis capabilities. For example, we can automatically track visit frequencies using CRM and LINE, and deliver personalized information based on individual customer preferences.
Initially, we thought we had no competitors in Japan. However, we discovered that POS manufacturers had already entered the mobile service business since mobile ordering requires POS integration. When we saw customers double-entering orders in both our system and their POS, we realized that mobile ordering alone wasn't enough.
Though we're newcomers to the POS industry, our strength lies in our restaurant industry specialization. This allows us to provide an integrated one-stop solution combining mobile ordering and POS systems.
How many restaurants are currently using your system?
About 6,000 restaurants have implemented our system. Unlike traditional restaurant systems, ours doesn't require wiring or relay devices - just an iPad for easy installation. Restaurants can have up to 2-3 iPads depending on their size.
We have implementations from Tokyo and Osaka to Sapporo and Okinawa. Our modularization makes it accessible for small establishments, with remote setup capabilities.
Was growth smooth from the beginning?
Not entirely. We provided our service completely free for about a year and a half until 2023. Initially targeting small businesses, we focused on offering competitive features and stabilizing our service among free POS apps.
After building a user base and confirming service continuity, we moved to paid plans. However, we faced challenges - we thought great features like video menus would encourage users to upgrade, but many were satisfied with just the free features.
We then shifted to a charging model based on concurrent device connections. The first device is free, but any additional devices would require one of the paid plans. This attracted larger establishments towards our paid plans.
Since we don't require on-site installation or support, we can offer our service at one-fourth to one-fifth of the industry prices. This makes our service accessible to regional restaurants with lower revenues compared to Tokyo or Osaka establishments.
Could you tell us about business support from local authorities?
We were the first company to receive a startup visa in Kyoto, which led to significant media coverage. This was incredibly helpful for us as recent graduates. Coverage in the Nikkei and Hong Kong news attracted interest from a Hong Kong angel investor.
They resonated with our business direction, and within just three days, we secured 30 million yen in investment. Without that media exposure, our journey would have been much more challenging.
What are your thoughts on starting a business outside Tokyo?
While Tokyo offers a larger market and easier sales opportunities, startup success isn't necessarily location-dependent. Many Silicon Valley companies started in remote locations. What's crucial is addressing the customer needs, providing appropriate solutions, and designing the right growth path.
Take Notion, for example - they found their inspiration in Kyoto and are now used worldwide. I believe more unicorn companies are location-independent, especially for PLG (Product-Led Growth) companies, Kyoto provides an excellent environment.
While Tokyo has numerous daily events that could be time-consuming to sort through, Kyoto offers select, quality events, allowing more time to focus on core business development."
Wang adds: "Kyoto's proximity to nature and calm environment allows entrepreneurs to walk along the Kamo River or hike nearby mountains after work. Such time and space are crucial for entrepreneurs.
What is funfo's vision for the future?
Our strengths lie in our low implementation barrier and ability to maximize potential through customer touchpoints via mobile ordering. Many small and medium-sized restaurants in Japan haven't yet adopted ordering systems, and we want to create an environment where they can focus on their core business.
Our overall mission is to become an infrastructure that connects people and food. To achieve this, we're working under the vision of 'spreading mobile ordering as a worldwide lifestyle.'
Specifically, we provide data analysis tools for business visualization and use AI to suggest products and revenue improvement measures.
We aim to support even small-scale restaurants in utilizing cutting-edge technology. Japan has a large market of about 700,000 restaurants, including general restaurants and employee cafeterias. We want to provide better infrastructure for this market."
Could you elaborate on the market potential?
Of Japan's 700,000 restaurants, 85% are small to medium-sized businesses. Many of these establishments aren't familiar with management techniques like data analysis, which is where our solution comes in.
Traditional systems can cost millions of yen, representing a third of opening costs - unrealistic for small restaurants. While tablet POS systems exist, they're designed for larger establishments in major cities and remain expensive.
In contrast, funfo eliminates installation costs, making it more accessible. We want restaurants who think 'we don't need this' to realize 'other places use it, maybe we need it too,' and ultimately provide an environment where they can focus more on cooking.
What advice do you have for foreign entrepreneurs looking to start businesses in Kyoto or Japan?
Qiao:
While planning is important in entrepreneurship, taking action is most crucial. You can always modify plans as you go along plus Kyoto is an ideal place for careful consideration and execution.
If you're targeting business within a 2km radius, Shinjuku might be even better. But if you're aiming for a larger scale, all of Japan becomes your market. Kyoto then becomes a place where you can thoughtfully develop bigger business ideas.
Wang:
Starting as students, we lacked experience in many areas. While you need to research your business content independently, Kyoto has various support organizations like the Kyoto Prefecture, Kyoto City, and Chimori-san for company establishment and market development. Seeking advice from these organizations can help efficiently grow your business.
[Editor's Note]
We strongly resonated with their vision that "even small restaurants deserve cutting-edge technology." The passion to support restaurants through technology was evident in Qiao and Wang's words. Particularly impressive was their approach of "relating to businesses with a B2C mindset rather than B2B." funfo's growth seems rooted in their position as a partner to restaurants rather than just a system provider.
Their observations about Kyoto and providing time to deeply consider business development was also inspiring. We look forward to seeing how funfo continues to grow as they bring their latest technology to small and medium-sized businesses that make up 85% of Japan's restaurant industry.
.jpg)
