Sequoia leads Series B for Chinese coffee brand

The proceeds will go towards supply chain upgrades, marketing, and product development, as well as building new sales channels. Distribution is already primarily through e-commerce.

Founded in 2015, Saturnbird aims to bring high-quality coffee to the mass market through the implementation of new production and packaging technology. Unlike most traditional instant coffee producers, the company uses freeze-dried powder to ensure its coffee tastes fresh. In addition, products are additive-free to appeal to health-conscious consumers.

Saturnbird was first launched in Alibaba Group's Tmall in 2018 and became the top-selling coffee brand during China's 2019 November 11 Single's Day shopping festival. It repeated the trick in the recent June 18 shopping festival, beating Nestle and Starbucks. 

As of August, the company had sold more than 60 million cups of coffee. Revenue is growing 150% year-on-year, while Saturnbird claims its costs are falling due to economies of scale. The price of a cup of coffee was recently cut from RMB10 to RMB7. Saturnbird has entered into a joint venture to build a factory, which is expected to increase production capacity tenfold.

The company said in a statement that instant coffee still accounts for more than 60% of the total Chinese coffee consumption. 

Saturnbird raised a pre-Series A round from Frees Fund in 2018 and then a two-tranche Series A led by Tiantu Capital.

The company is one of several domestic food brands attracting venture capital interest. Local oatmeal specialist Wangbaobao recently raised approximately RMB100 million in Series B funding while instant noodle brand Baijia Food secured a RMB200 million Series B.

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• Topics
• Greater China
• Early-stage
• Consumer
• Technology
• China
• Sequoia Capital
• e-commerce
• Frees Fund
• TMT