Is Tea Drink Brand Mixuebingcheng about to Land Financing from Hillhouse and Meituan?
As tastes change and companies innovate, the beverage industry is in full swing in China.
According to people familiar with the matter, the tea drink chain brand Mixuebingcheng will complete a new round of financing, led by Hillhouse Capital and Longzhu Capital backed by Meituan. The company plans to raise CNY 1 billion to CNY 2 billion as it prepares to go public.
However, Mixuebingcheng declined the truth of the reported source.
Headquartered in Zhengzhou, Mixuebingcheng offers products including milk tea, fruit tea, ice cream and other categories, focusing on the lower end of the market with product prices mostly below CNY 10. The target users are young consumer groups represented by college students, and stores are mainly opened around universities, pedestrian streets and shopping malls.
According to Chinese media, the company recorded revenue of CNY 6 billion and net profit of CNY 800 million, mainly from charging franchisees for materials. In 2020, Mixuebingcheng announced that it had 10,000 stores nationwide, making it the tea chain brand with the largest number of stores in China.
Although the single-serving price is basically below CNY 10, relying on the supply chain's upstream advantages and relatively simple product materials and ingredients, the cost of many products is kept stable at between CNY 2-5. According to the official website of the company, its gross profit margin reaches around 50%.
The food and beverage industry has performed well since the start of 2020. According to data from Wind Terminal, as of September 29, the Shenwan Food and Beverage Index has risen by 46.89% in the past six months. In addition to Mixuebingcheng, Genki Forest got an investment from Sequoia Capital in July with a post-valuation of USD 2 billion. Besides, Nongfu Spring, a leading company in packaging water and beverages, also landed on the Hong Kong Stock Exchange in September. Also rooted in the beverage market, Gu Ming, a tea brand with more than 3,000 stores, completed strategic financing in July 2020 from Sequoia Capital China and Longzhu Capital.