Tim Hortons, the Canadian espresso and doughnut big, has raised a brand new spherical of funding for its Chinese language enterprise. The funding is led by Sequoia China with participation from Tencent, its digital partner in China, and Jap Bell Capital. The spherical comes two years after Tim Hortons made its foray into China’s booming espresso business.
Tim Hortons didn’t disclose the quantity of its newest fundraise however famous in a social media post that the proceeds will probably be used for opening extra shops, constructing its digital infrastructure, model presence and extra.
Tencent, the Chinese language social media and leisure behemoth, first backed the 57-year-old Canadian espresso chain last May. On the time the tie-up was seen as Tencent’s transfer to counter archrival Alibaba’s alliance with Starbucks to ship espresso and assist the American espresso titan go digital in China.
Tim Hortons’ collaboration with the WeChat dad or mum is in an analogous vein. It has to date amassed three million members via its WeChat mini program, a kind of light-weight app that runs throughout the on the spot messenger. To enchantment to younger Chinese language customers, Tim Hortons opened an esports-themed café with Tencent, China’s greatest gaming firm.
Two years into working in China, Tim Hortons says it has reached storefront-level profitability with a footprint of 150 places throughout 10 main cities. It plans so as to add greater than 200 places in 2021 and attain 1,500 shops nationwide within the subsequent few years.
The dramatic rise and fall of espresso supply startup Luckin introduced the prospects of China’s espresso market to the forefront. Regardless of the funding frenzy round Luckin and different espresso companies, espresso ingesting nonetheless has a comparatively low penetration in China in comparison with international locations like america and Germany. However, espresso consumption is rising at a a lot quicker price of 15% in China, effectively above the worldwide common of two%, and is projected to succeed in 1 trillion yuan ($150 million) in 2025, in keeping with a 2020 report by Dongxing Securities.