HeyTea Bets on Coffee, Again

Chinese boutique tea chain HeyTea (Chinese: 喜茶) was reported to hold a 12% stake in FEW (Chinese: 少数派咖啡), a five-year-old roasted coffee service provider, in mid-June.

In fact, this was not the tea company's first play in the coffee category. Previously, in July 2021, Chinese speciality coffee retailer Seesaw Coffee received an investment of CNY 100 million (USD 14.9 million) in the Series A+ round from HeyTea and its shareholders.

In terms of the milk tea segment, HeyTea made an acquisition of WeLemon Lemon Tea (Chinese: 王柠柠檬茶) under the name "Xi Xiao Cha", with a combined stake of 70%, and in October 2021, HeyTea made another strategic investment in WAKEMARU MOMO (Chinese: 和気桃桃) with a 5.1% stake.

In the same month, HeyTea also tapped into the oat milk sector and alcoholic beverage sector by investing in YePlant (Chinese: 野生植物) and premixed cocktail brand WAT, respectively.

As of press time, HeyTea has completed 5 rounds of financing from a batch of well-known investors. They include IDG Capital, Hillhouse Investment, Temasek Holdings, Sequoia Capital and Tencent. After the Series D round in July 2021, HeyTea's valuation amounted to CNY 60 billion.

The domestic new-style tea beverage market is experiencing fierce competition, where Nayuki (2150:HK), Mixue Bingcheng, Coco, LeLeCha, Happy Lemon are some of the leading players.