Author: Linyan Feng May 13, 2019 11:08 AM (GMT+8)

China's tea-drink brand HeyTea has closed its new round of funding on May 13, which values the firm at more than CNY 8 billion (USD 1.16 billion). The round was led by Tencent and Sequoia Capital.

HeyTea store. PHOTO: Credit to HeyTea

China's tea-drink brand HeyTea (喜茶) has closed its new round of funding on May 13 with an undisclosed amount of investment. According to China's self-media Landongpro, this round of financing, which values the firm at more than CNY 8 billion (USD 1.16 billion), was led by Tencent and Sequoia Capital.

HeyTea did not immediately respond to our inquiries and Sequoia has no made comments about the deal.

The company has completed two rounds of funding before, totaling CNY 500 million (USD 75 million). Its investors include Meituan Dianping.

Founded in 2012, the company started out in a small city in Guangdong Province and later expanded to most tier-one and tier-two cities in China. The firm has 220 direct-sale stores in 28 cities in China and two in Singapore, where HeyTea’s rival Nayuki also launched its first store. The two brands accused each other of copycat behavior last year, suggesting how cut-throat the competition is in China's drink industry.

Meanwhile, HeyTea announced its plan to enter the coffee market to compete with Luckin, a fast-growing coffee chain that is seeking an initial public offering on Nasdaq this week. According to its plan, HeyTea's coffee is priced at only CNY 1 higher than that of Luckin, which was founded last year.

HeyTea also has jumped on the bandwagon of digitalization last year, as China eyes the opportunities brought by the new retail trends.

For instance, this year will be the first step for bakery brand Bliss Cake (幸福西饼) to realize its vision of achieving information symmetry so that its mobile app users can check on their phones to see what products are in the process of being baked.

HeyTea started a trial run of its WeChat mini-program HeyTea Go in the second half of 2017. Launched in June 2018, the program enables customers to order online without waiting in lines for a long time.

HeyTea Go has a registered user base of 6 million and generated 35% of the total orders, with an average monthly re-purchasing rate of more than 36%. Relying on WeChat as its main online traffic entrance, HeyTea plans to design its equivalent of the Starbucks app to analyze current users to get a better understanding of their consumption habits and preferences.