On April 24, 2019, the new retail coffee brand Coffee Box (连咖啡) announced the completion of the B3 round of fundraising of CNY 206 million with a valuation of CNY 1 billion right after Luckin Coffee filed for its IPO in NASDAQ US one day earlier. It seems Luckin’s application helped Coffee Box in its business. This round of fundraising was jointly invested by the founders of the Coffee Box WANG Jiang (王江) and ZHANG Xiaogao (张晓高), Qiming Venture Partners (启明创投) and Gaorong Capital (高榕资本). Qiming Venture Capital and Gaorong Capital are also the main investors in the B+ round of investment.
Coffee Box was founded in 2014, initially operated as a branded coffee delivery company for Starbucks, Costa, etc. In 2015, it launched its own branded coffee, focusing on Internet promotion, providing large subsidies to consumers by attracting them with a low-cost delivery model. After the WeChat small program was launched, its delivery service was all contracted in WeChat. In the Coffee Box small program, users can buy American coffee for only CNY 3.8 and latte coffee for CNY 5.8.
At the beginning of this year, Coffee Box was doing optimization and upgrading for its stores. Since March 2019, it has entered a period of intensive new products promotion and launched a new membership program. After this round of strategic adjustment, Coffee Box has returned to profitability in April and will launch a new round of expansion plans
As a matter of fact, by the end of 2017, Coffee Box had achieved profitability in more than 100 of its coffee shops. It launched the famous anti-balloon coffee, pink coconut water, and other KOL drinks, becoming a dark horse on the domestic coffee track. During the 12.12 shopping festival, the peak sales of Coffee Box on a single day was close to 400,000 cups, equivalent to one-day sales of 1000 stores in Starbucks.
However from Dec. 2018 to Jan. 2019, after a round of 30% price increase, Coffee Box decided to close a batch of coffee stations with negative gross profit based on financial data calculation, the purpose is to return to the profit model as soon as possible, ready for the economic downturn. The core purpose of this round of stores slimming is due to the reconsideration of profits over the money-driven expansion, which is the primary factor in the offline stores' investment assessment by investors.
In early April, Coffee Box has been testing its new model, the much cheaper "pocket coffee" in the Wangjing area of Beijing. At present, there are only two flavors, American and Latte. Because of the promotion, the unit prices of the two are reduced from CNY 12 and CNY 18 yuan to CNY 6 and CNY 8 respectively.