Text丨Peng Qian and Dong Jie
36 Krypton exclusively learned that recently, Lele Tea and Naixue’s Tea signed an investment agreement of 525 million yuan. After the transaction is completed, Nayuki’s Tea will become the controlling shareholder of Lele Tea, and Palm Capital will serve as the exclusive financial advisor for this transaction. This round of financing also broke the record for the highest financing amount in Lele Tea’s history.
The last round of financing of Lele Tea stayed in July 2020, and was invested by Longbai Capital. Previously, Red Star Macalline and Pusi Capital under Wang Sicong had participated in the financing of Lele Tea.
Lele Tea financing information source: Tianyancha
In July 2021, Guanchao New Consumer once reported that both Yuanqi Forest and Heytea wanted to acquire Lele Tea. Both parties value the channel value of Lele Tea very much, and gave a valuation of 4 billion yuan, and Lele Tea also expressed its willingness to sell.
In response to the news, Nie Yunchen, the founder of HEYTEA, once responded in the circle of friends: “The news is not true. I did have contact with it for a period of time after being introduced by an intermediary, but after deeply understanding the internal situation, business data and status, I have completely, completely and resolutely give up.”
Lele Tea revealed to the media that Lele Tea is currently developing independently, operating in good condition, and has no plans to be acquired. It will do its job well and live up to the trust of consumers. Yuanqi Forest, another rumored potential acquirer, also denied the news to the media.
According to 36 Krypton, from 2020 to the first half of 2021, Lele Tea did receive merger invitations led by Boyu Capital and Black Ant Capital. The former hopes to merge Lele Tea with Manji Dessert, while the latter is Hope Heytea will acquire Lele Tea. However, the former proposal was quickly rejected by Lelecha, while the latter’s negotiations began at the end of 2020.
Previous reports mentioned that Xicha’s valuation of 4 billion yuan was not accurate. 36 Krypton learned that the price given by Hey Tea is 2 billion yuan, but Lele Tea believes that the brand value is underestimated and hopes that the price can be doubled. The founder Guo Nan advocated the sale of the company. In order to smoothly promote the sale plan, Guo Nan repurchased the shares of the other two founders at the end of 2020. However, the sale plan ended in failure because Lele Tea and Hey Tea failed to agree on some conditions.
In 2016, Lele Tea, co-founded by Guo Nan, Wang Jian and Zhang Kun, opened its first store in Shanghai. Zhang Kun, who has worked in the baking industry for more than 20 years, is in charge of the baking business, while Guo Nan and Wang Jian are in charge of specific operations, taking turns to perform the duties of CEO. In October 2019, Wang Jian left the company. In 2020, Lele Tea introduced executive Li Mingbo from outside to take over as CEO, while Guo Nan still leads the company’s major decisions.
According to 36 Krypton, as of now, Lele Tea has 140 stores (100 at the beginning of 2022), including 60 in Shanghai. Lele Tea plans to open a total of 72 new stores this year. By the Spring Festival in 2023, the total number of stores will reach 158. This means that in 2022, when the epidemic continues to recur, Lele Tea is still accelerating its expansion.
The establishment time is short, and the speed of store opening and operating efficiency cannot be balanced. Lele Tea pays more attention to the sales volume of a single store. Lele Tea’s store expansion idea is to open the next store after making a profit, unlike Naixue’s accelerated store opening, and it cannot raise a large amount of financing and operate more efficiently like Hey Tea. 36 Krypton learned that before the epidemic, Lele Tea had maintained a profit-loss balance, but the repeated epidemics caused Lele Tea to fall into a loss.
36 Krypton learned that according to calculations, according to the previous store type of Lele Tea, the average monthly sales of the store can be evened between 500,000 and 600,000 yuan. But when the epidemic hit, the offline flow of people dropped sharply, destroying the original big store model. After the epidemic, the monthly sales of new tea brands can only be maintained at about 100,000 to 200,000 yuan, which means that the store area must be reduced, and the corresponding costs of ingredients, manpower, materials, and equipment need to be greatly reduced. That’s why, Naixue and Lelecha are trying to find a way to open a small shop.
In recent years, there have been endless brand wars for new tea drinks, and the current brand structure is clearly stratified: HEYTEA, Naixue’s tea, and Lele tea compete for first- and second-tier cities; new tea brands are blooming everywhere, such as Shanghai Ayi, Coco, and tea Baidao and others continue to make efforts; and the old player Michelle Bingcheng began to counterattack the first- and second-tier cities after the epidemic.
According to public information, the number of Naixue’s stores will exceed 1,000 by the end of the year. In the first half of this year, its revenue was 2.045 billion yuan, and its adjusted net loss was 249 million yuan. Heytea also opened franchises to accelerate expansion. According to Jiuqian’s data, As of the end of November, HEYTEA’s revenue was about 4.2 billion yuan, and the number of stores was nearly 900. The number of stores of the three Zhonglele teas was the least, with less than 200.
It has been two years since the last round of financing. During this period, Lele Tea’s financing and sales rumors continued. After winning the 552 million financing of Naixue’s tea, the combination of the two will have a new round of impact on the tea drinking landscape.
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Event Tracking
- 2022-12-05 Naixue announced to become the largest shareholder of Lele Tea: investing 525 million yuan to hold 43.64% equity
- 2019-04-03 Lele Tea completed the Pre-A round of financing of nearly 200 million yuan
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