Nayuki’s Tea, one of the biggest bubble tea chains in China, will complete a new round of funding that will help the company raise close to $100 million, providing the company with much-needed capital to compete for market share with major rival HEYTEA, media outlet 36Kr reported.
Coming more than two years after Naixue’s Series A, the new round of funding is led by Shenzhen Capital Group, several people with knowledge of the matter told 36Kr. A spokesperson of Naixue’s said they had not received relevant information.
In February, Naixue’s Tea filed confidentially to list in the US, looking to raise as much $400 million in 2020, according to a Bloomberg report. The report also said Naixue was looking to complete a pre-IPO funding round of $50 million to $100 million.
However, due to the impact of the financial fraud committed by Chinese coffee chain Luckin Coffee, Nayuki’s Tea has moved its IPO location from the US to Hong Kong, people familiar with the matter told 36Kr.
Founded in 2015 by Shenzhen Pindao Restaurant Management Co., Nayuki sells fresh fruit tea, cold-brewed tea, and baked goods, targeting primarily female customers between 20 and 35. The chain has 349 direct-selling stores in more than 50 cities in China as of February 2020, with no franchise stores, according to the company website.
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Naixue has completed two funding rounds prior to the new, potentially pre-IPO series. After its Series A+, led by Tiantu Capital, the bubble tea chain was reportedly valued at around RMB 6 billion, becoming the first unicorn in China’s tea drink industry. One of the founders of Naixue’s, Peng Xin, told Chinese media that the company chose Tiantu because it did not have requirements on the rate of the chain’s expansion and did not interfere with Nayuki’s operations.
One of Nayuki’s largest competitors is Shenzhen-based HEYTEA, which has seen its valuation rocket close to 80% in less than a year to RMB 16 billion. The company received an investment led by Tencent and Sequoia Capital in July, boosting its market value to RMB 9 billion. In March, the company was reported to have come close to completing another round of funding led by Hillhouse Capital Group and Coatue Management.