HEYTEA to Close New Round of Financing, Valuing at RMB60bn

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Chinese tea drink chain HEYTEA is close to complete a new round of financing led by its current shareholders, and the firm is reportedly to get an estimated valuation of RMB60bn, compared to an RMB16bn valuation in March 2020, as reported by 36Kr on June 24. This would be the fundraising of the largest scale in the domestic tea drink industry, and it is expected to make HEYTEA the most valuable tea drink start-up in China. Nevertheless, the tea drink start-up declined to comment on the financing news so far. Notably, one of HEYTEA’s major domestic peers, Nayuki, will debut in Hong Kong on June 30 to raise up to HKD5.1bn (USD657m), getting a valuation of between HKD37.9bn and 40.8bn.

HEYTEA completed the last round of financing, the C round, in March 2020, making it valued at RMB16bn. Prior to that, the company successively closed its A and B round fundraising in 2016 and 2018, receiving RMB100m and RMB400m from investors, including its largest shareholder IDG Capital and the second-largest shareholder Meituan Group [3690:HK], together with BA Capital and Investoday. According to HEYTEA, it opened 304 new stores in 2020 and raised the number of stores to 695 at the end of 2020 and more than 800 at present. According to a report by China Insights Industry Consultancy, Nayuki ranked second in Chinese premium teahouse chains with a market share of 18.9% by the end of 2020, while HEYTEA occupied a 27.7% market share. Additionally, the country’s tea beverage market reached RMB442bn in 2020.

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