Canadian coffee chain Tim Hortons has closed a new financing round for its China business, which was led by Sequoia and joined by the existing investors Eastern Bell Capital and Tencent, the latter informed on its official WeChat account on Friday, without sharing financial details.
Tim Hortons, which entered the country in 2019, runs more than 150 shops in 10 large cities including Beijing and Hangzhou and has achieved operational profitability for all stores, according to Tencent Investment. Together with the internet titan, it co-launched an e-sports themed coffee shop in Shanghai in November, as part of a strategic cooperation sealed back in August. Customers can also order their coffees on the Tims mini program on WeChat, which has already gathered nearly 3 million members.
The company plans to spend the new funds on store expansion, infrastructure digitization, as well as branding. This year, it expects to open 200 new outlets in China, including mini shops, standard and themed stores, with the goal to reach 1,500 cafés in the next few years.
“We are confident that there is huge potential in the Chinese coffee market as this beverage popularizes fast in the country,” said China CEO Lu Yongchen.
Starbucks is the most well-known coffee brand in the country with 4,800 stores in 200 cities. One of its fiercest challengers has been Luckin Coffee which started with its first outlet in October 2017, to grow to more than 4,500 shops by the end of 2019, the same year it listed on NASDAQ. In December, the chain settled fraud charges with the SEC for a USD 180 million penalty. China’s State Administration for Market Regulation also pressed charges for irregularities.
Despite its short-lived glory, the company boosted the popularity of the beverage and digitization of the coffee industry in China. Starbucks, in May 2019, started to tap into Alibaba’s food delivery unit Ele.me to bring its cups directly to consumers.