An infusion of fresh cash will help Tso Chinese Delivery open more locations and further develop the technology underpinning its takeout-and-delivery-only model.
The Austin-based restaurant chain, which operates legally as Tso Delivery Inc., filed securities paperwork in late May indicating it had raised $8.25 million in equity financing. Tso CEO and co-founder Min Choe said the offering began prior to the pandemic but closed in early May and was led by New York-based Rellevant Partners.
It follows a $2 million infusion from 2019 that Choe characterized as a bridge round.
Much of the new money will be used to open additional locations — after a slight delay, the company opened its fourth spot, in Round Rock, on May 24 — while some will go toward tech and infrastructure, Choe said.
Tso is on track to expand next into Pflugerville, Cedar Park and South Austin. There is a letter of intent for a Pflugerville store, Choe said, but he did not disclose an address. He said he hopes to open the restaurant in next year's first quarter, while the others could come by the second quarter of 2025. He did not disclose the name of the company’s real estate broker.
Tso Chinese leaders had previously disclosed hopes to expand to seven Austin-area stores through 2023.
The company was founded in 2016 and places a lot of emphasis on tech, with data scientists and in-house market research using software to determine where to grow next. Choe describes Tso as a data analytics company. It also has its own fleet of delivery cars.
"What Min and Angell have created is truly remarkable," Janice Meyer, Rellevant Partners co-founder, said in a statement. "Tso's proprietary and state-of-the-art technology, developed purposely for the take-out and delivery markets, provides more features and data than available to other operators, giving the brand a huge advantage in a space that still boasts many single unit and traditional operators."
Rellevant Partners is a female-founded growth equity firm that invests in restaurants, restaurant technology and food and beverage. Other companies it has invested in include fast-casual Indian chain Rasa in Washington, D.C., and Boston-based Motif FoodWorks, which makes plant-based food.
"Beyond providing growth capital, Rellevant's extensive experience in guiding rapidly growing restaurant brands positions us to surpass our competition and establish ourselves as the undisputed leader in our segment," Angell Tsang, Tso Chinese's chief technology officer and other co-founder, said in a statement.
Other investors in the company have included Walter Robb, former Whole Foods Market co-CEO; Brett Hurt, co-founder of Bazaarvoice and Data.world; and Brian Spaly, founder of Bonobos and Trunk Club.
