Chinese noodle shop chain raises $68m Series D

Meridian Capital also took part in the round, which took Hefu's total fundraising to RMB850 million since inception. Tiger Cub Funds, Wuhan Zhonghe Ventures, and Wangju Capital provided RMB30 million in Series A funding in 2015. This was followed by a Series B from Trend Capital in 2016. Juele Fund and Tiger Cub were responsible for a Series C round in 2017, according to AVCJ Research's records.

Established in 2013, Hefu's brand aesthetic is inspired by Zen Buddhism. Its restaurants are decorated like ancient Chinese study rooms and it advocates “slow fast food,” encouraging customers to take their time to enjoy meals. The company claims 60% compound annual single store sales growth in recent years.

There are 300 outlets across 32 cities, including all top-tier urban centers, and overseas expansion is underway. Hefu spent three years developing a standardized production system - there are detailed guidelines for cold storage and weights and measures of ingredients to ensure consistency in taste - before opening its first store. The company created a central kitchen of 15,000 square meters that can support 1,000 outlets.

Even though Hefu suspended its operation for several months due to the coronavirus pandemic, sales in October were up 105% year-on-year. According to the China Culinary Association, the country's catering industry is expected to generate RMB5 trillion in revenue this year and continue growing at approximately 9% per annum.

Indeed, offline retail has gained traction with VC investors this year. Last month, fruit tea brand Sweet7 raised RMB150 million from Shunwei Capital and Insight Fund, a vehicle launched by financial advisor MM Capital.

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• Topics
• Greater China
• Expansion
• Consumer
• China
• Food
• Tencent
• Growth capital