China-based teahouse chain Gaga Cafe secured RMB180m ($26.2m) today in a series A round led by Legend Capital, the venture capital firm formed by conglomerate Legend Holdings, according to China Money Network.
Founded in 2010, Gaga Cafe operates a chain of teahouses across China that sell freshly made fruit teas, juices and coffee, as well as snacks and seasonally inspired dishes such as salads and pasta.
The company currently owns 23 outlets and will use the proceeds from the round, which included an unnamed industrial investor, to open additional locations, in addition to improving its supply chain and IT system, including its mobile payment capabilities.
Kang Yi, investment director at Legend Capital, said: “With the current consumption upgrade trend, catering business will demonstrate solid growth in the next few years. Businesses with standardised food products and differentiation will grow faster.
“The beverage market will be a huge market worth of trillions of renminbi. Successful brands need to understand and follow young consumers’ tastes well.
“Gaga Cafe has maintained fast growth and healthy margin in eight years. We are confident about their product innovation and operational abilities.”