Chinese milk tea chain HeyTea on Tuesday announced it has secured $500 million in new financing, led by IDG Capital, He Boquan, Longzhu Capital, Sequoia China, BA Capital, Tencent, Hillhouse Group, Coatue and other investors.
With the completion of this latest round of financing, the overall market value of HeyTea reached 60 billion yuan ($9 billion), setting a new record for China’s milk tea industry.
The popular milk tea brand previously conducted a Round C of financing in March 2020, which was led by Hillhouse Capital China and Coatue Management.
HeyTea, formerly known as Royal Tea until a brand overhall in 2016, was founded in Guangdong by Nie Yunchen in 2012.
Tailored for white-collar workers and younger generations, HeyTea is committed to creating a brand-new beverage consumption model, integrating traditional milk tea with healthy tea culture.
The firm’s 2020 annual report showed that as of December 31, 2020, the company has opened almost 700 stores in 61 cities around the world. Southern Metropolis Daily reported that as of July 8 of this year, the number of HeyTea stores in the world has exceeded 820.
HeyTea’s online retail business performed brilliantly during a nationwide shopping spree in June. Its gross merchandise volume across all e-commerce platforms reached 20 million yuan ($3 million).
Competition among new milk tea brands this year seems more intense. Nayuki’s Tea, a competitor of HeyTea, on June 30 officially listed on the Hong Kong Stock Exchange, offering the “first stock in new-style tea-based beverages”. Facing Nayuki’s market value of about $3.7 billion, HeyTea’s founder Nie Yunchen previously expressed the company has no plans to go public this year.
Using a promotional jingle with catchy lyrics – “I love you, you love me, Mixue Ice Cream & Tea…” – another prominent brand, MXBC, has gone viral on Chinese social media recently, helping the firm capitalize on its business model of small profits and quick returns.