Chinese bubble tea chain Nayuki Holding has acquired a 43.64% stake in Shanghai Chatian Catering Management, which operates the LELECHA brand, for 525 million yuan ($75.3 million), according to a bourse filing by Nayuki on Monday.
Upon completion of the investment, Hong Kong-listed Nayuki will hold around 85.08% stake in Lelecha Cayman, which in turn indirectly holds 43.64% equity capital of Shanghai Chatian Catering Management, per the filing.
Nayuki said in the filing that LELECHA’s leading position in the freshly-made tea market as well as its strong brand and consumer recognition in Eastern China are the reasons for the investment. “In addition, the investment will further optimise the competitive environment of the industry and reduce the costs of the company in store expansion and operations in the future,” the firm said in the filing.
Established in October 2016 in Shanghai, LELECHA previously snapped a strategic investment from Cypress Capital in a Series A round in July 2020, without divulging the financial details, according to corporate information platform Aiqicha. Prior to that, it secured $30 million (200 million yuan) in a pre-Series A round in April 2019 led by Vertex Ventures China. Zhijun Capital, Pusi Capital, Zhonghai Investment, Hina Group, and Ruchuan Capital Investment also joined the round.
The news comes at a time when Nayuki races to outrun its major rival HeyTea amid fierce competition.
Nayuki was the second largest teahouse brand in terms of total retail consumption value among China’s premium modern teahouse market in 2020, with a market share of 18.9%, while HeyTea, as the largest player, accounted for a market share of around 27.7%, according to data from research and consulting firm China Insights Consultancy.