Shunwei leads $22m round for Chinese fruit tea brand

The company was founded in 2006 and initially operated a Shanghai-based dessert restaurant chain called Xieji. The Sweet 7 brand was introduced in 2015 and began to gain momentum in 2018. The company claims a 300% growth rate in terms of annual revenue and profit.

Sweet7's stand-out product is based on Mango pomelo sago, a Hong Kong invented in 1984 by Lei Garden. The Sweet7 version is a tea packaged in a plastic bottle instead of a bowl. It is priced at RMB15-25 per cup, much cheaper than traditional Mango pomelo sago. The company has launched a series of derivative products, most recently expanding into non-mango fruit teas.

Sweet7 has more than 800 shops mainly located in eastern China. It expects to have 1,000 outlets by the end of 2021, and 5,000 by 2025. The company operates a franchise model to support rapid expansion, though outlets in key urban areas are run directly. For example, 60% of Shanghai stores are directly operated. This falls to 15% in nearby cities.

Huancheng Xie, Sweet7's founder, said that the proceeds will go to the expansion of directly-operated stores. He wants 20% of stores in eastern China to be centrally controlled. Another priority is strengthening the company's supply chain, purchasing goods directly from farms in order to solidify the brand and create barriers to entry. Sweet7 will also target digitalization, leveraging data for more accurate marketing and selection of store locations.

Numerous local Chinese brands have received VC investment this year, including coffee specialist Saturnbird, oatmeal producer Wangbaobao, and instant noodle brand Baijia.

MM Capital served as the exclusive financial advisor for Sweet7's latest round.

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• Topics
• Greater China
• Early-stage
• Consumer
• China
• Shunwei Capital Partners
• Food
• Venture