EqualOcean has been informed that Chabaidao (Chinese: 茶百道), a Chinese tea and beverage brand, has closed a new round of financing with a funding amount of RMB 1 billion and a current valuation of nearly RMB 18 billion.
Chabaidao is one of the leading brands of tea beverage chains, originated in Chengdu and was founded by Wang Xiao Kun in 2008. According to the scale caliber, Chabaidao is the TOP4 brand of tea beverage chain brands in China. According to CCFA statistics, as of October 2022, the number of Chabaidao stores nationwide was 6,110, and in March this year, Chabaidao announced that the number of stores exceeded 7,000.
In addition to its large scale, Chabaidao also has a remarkable profit performance. According to the report, in 2022, Chabaidao will achieve revenue of about 4 billion yuan, and the profit amount will reach about 900 million yuan. This represents a profit margin of about 22.5%. Although the scale is only about one-third of MIXUE(Chinese: 蜜雪冰城), Chabaidao's profit margin is higher than the former.
According to Chabaidao's research results, Chabaidao opened the Chengdu area for franchising in 2016, and then opened the national franchising in 2018, mainly in hospitals, streets, transportation hubs, and other store types in first to fourth-tier cities, and the overall takeaway business is dominant, with takeaway revenue contribution up to 70%-80%. Depending on the city level, Chabaidao customer unit price fluctuates slightly, a total of about 16 yuan -18 yuan, belongs to the central price belt of tea drinks, but also the price of new tea drinks at the moment the largest Red Sea market. Most of the brands in the tea beverage circuit, such as GuMing(Chinese: 古茗), Yidiandian(Chinese: 一点点), Shuyi(Chinese: 书亦), etc. are involved in the competition.
EqualOcean has been informed that Chabaidao opened the round of financing as early as last year, the valuation has also changed several times, including in April this year, with a valuation of about 17.5 billion yuan for this round of financing.
Compared with the lively market in 2021, when the valuation of a single deal exceeded 100 million yuan, two years have passed and the capital market has become more and more calm. Another important market factor is that earlier this year, the "traffic light" rule once caused industry concern and heated debate, and chain franchising as the core of the tea beverage industry, the next capitalization is considered to meet a certain resistance. However, there are also consumer investors who said that the traffic light policy is only a short-term phase product, from the medium to long-term perspective, strong profitability will still be favored by capital.
The lead investor of this round of financing is Orchid Asia(Chinese: 兰馨亚洲), and the followers include Loyal Valley Capital(Chinese: 正心谷), Caogenzhiben(Chinese: 草根知本) and CICC(Chinese: 中金). It is not clear where Chabaidao this financing money will be used, in the competition for the scale of 10,000 stores, as well as the price of killing the market background of the Red Sea market, the upstream supply chain, or the big money, such as raw materials factories and cold chain capabilities, will obviously stand out as the key to ensure quality under the premise of scale.