Genki Forest, or “Yuanqi Senlin” in Chinese, a bottled beverage maker, is close to completing a new financing round with its post-investment valuation possibly exceeding USD 2 billion, tech media 36Kr reported on Wednesday, citing sources familiar with the matter. Sequoia Capital China and Genesis Capital will enter its cohort of backers.
The firm, founded in 2016, has been on the rise in recent years, thanks to its “zero sugar”, “zero fat”, and “low calories” ready-to-drink products, including fruit-flavored tea, milk tea, and sparkling water, as their targeted young consumers become more health-conscious.
In October last year, Genki Forest reportedly raked in RMB 150 million (USD 21.43 million) in the Series B round that counted Longfor Capital, Black Ant (BA) Capital, and Gaorong Capital as its investors, reaching a value of RMB 4 billion (USD 571.4 million).
According to the 36Kr report, Genki Forest reached RMB 260 million (USD 37.14 million) of sales in the first five months of 2020, already surpassing its annual sales from 2018. The young beverage brand, which managed to place its soda and tea on the shelves of every convenience store and supermarket, recently also released new energy drinks and yogurt products. Aside from the “healthy lifestyle” approach, the company owes its success to marketing campaigns that leverage current internet trends, such as celebrity branding and selling through livestreaming.
A hotly contested market
The non-alcoholic beverage industry in China has seen a slew of strong players in recent years, including new-style tearoom chains HeyTea and Naixue, and the so-called “Starbucks challengers” that are attracting capital with innovative concepts like mixed-flavored fresh fruit tea and even cheese tea.
In March, HeyTea closed a new funding round, led by big-name investors Hillhouse Capital and Coatue Management, KrASIA reported. Although the figure of the investment was not disclosed, its valuation reached RMB 16 billion (USD 2.3 billion), according to sources. HeyTea has added bottled tea products to its offerings and is competing for the same market as Genki Forest. Just a couple of days ago, HeyTea launched zero calories sodas under the sub-brand “Little HeyTea Factory.”
Back in February, Naixue filed confidentially for a US initial public offering that could raise as much as USD 400 million, Bloomberg wrote. The scandal-hit Luckin Coffee also has its own tea sub-brand called “Xiaolu Tea.”