Upstarts: Rickshaw in the Spotlight

Rickshaw grabs attention with dumplings and industry connections.

By David Farkas, Senior Editor -- Chain Leader, 11/1/2006

Rickshaw Managing Partner Lao learned to make dumplings while growing up in Pasadena, Calif. Chef-driven: Rickshaw’s signature product, a handmade dumpling that is steamed or fried, was developed by acclaimed chef Anita Lo.

Do humble dumplings, which humans have been consuming for 3,000 years, have legs? New Yorkers Kenny Lao and David Weber want to find out.

Eighteen months ago, the partners and their investors poured $600,000 into Rickshaw Dumpling Bar, a trendy-looking, 1,600-square-foot eatery on Manhattan’s busy West 23rd Street. The menu, which hangs above three cashiers, features six types of dumplings, each with its own dipping sauce.

They come pan-fried or steamed, in orders of six ($4.95) or nine ($6.95). Customers can also order them with a salad or soup that’s been designed to enhance the dumpling. Chicken & Thai Basil with Spicy Peanut Sauce, the most popular dumpling, is paired with Peanut Sate vinaigrette or soup ($3 extra for each).

Fund Raising

Rickshaw rang up about $1.4 million in its first year, claims Lao, who worked briefly as an investment banker before joining New York-based Myriad Restaurant Group in 2000 as special projects director.

That figure, along with steadily rising same-store sales, has attracted the attention of even more investors, Lao says. In late September, a second round of funding raised $1.5 million, half of the $3 million needed to open six more dumpling bars within the next three years in New York City. “We should finish the round by late fall,” Lao promises.

Meanwhile, the former New York University Stern School of Business classmates will open the next two dumpling outposts in Union Square and Wall Street. Both areas are ideal, they claim, offering plenty of foot traffic and office workers who can afford Rickshaw’s $9 check average. Rents, however, are higher in restaurant-dense Union Square. Lao won’t disclose what he’ll have to pay but acknowledges it will be more than his current rent, which is in the “low teens” as a percentage of sales.

Class Project

Lao, whose Chinese mother taught him how to make dumplings as a child, recalls selling them to fellow students at Stern. While there, he and Weber won a prize for a business plan they wrote. It showed how a dumpling-only restaurant could be profitably multiplied. “The prize made it easier to raise money,” Lao says.

Their timing couldn’t be better, asserts New York restaurant consultant Clark Wolf, who has visited Rickshaw. “There are all kinds of Asian foods out there, and dumplings could well become the next spring rolls, which are now considered an American food,” he says.

T o make sure their new venture attracted attention, Lao and Weber cut a deal with Anita Lo, a French-trained chef and co-owner of acclaimed Annisa, in New York. Lo develops recipes—which currently feature soy beans, glass noodles, jicama and shiitake mushrooms along with pork, chicken, duck and shrimp—and provides training.

Today, dumplings are stuffed and wrapped by hand in the basement of the restaurant, although Lao will likely use a commissary or an outside manufacturer once several units are open. He and Weber, who handles administrative duties, also outsource accounting.

Lao’s former boss at Myriad and Rickshaw investor Michael Bonidies doesn’t doubt Lao’s ability to build a dumpling empire. “What Kenny is really good at,” he says, “is staying on track and following through.”