China consumer brands Genki Forest, Tasogare secure funding
Two emerging Chinese beverage brands - Genki Forest and Tasogare, which focus on sparkling water and coffee, respectively - have completed new funding rounds.
Warburg Pincus, L Catterton, and Sequoia Capital China led a round of undisclosed size for Genki at a valuation of $6 billion. Other investors include Temasek Holdings, Gaorong Capital, and Longfor Properties.
Established in 2016, the company has expanded from sparkling water into instant tea, energy drinks, and yogurt. Its beverages are said to contain no sugar, calories, or fat.
Genki posted sales of RMB2.9 billion in 2020 with sparkling water accounting for 70%, Xinhua News Agency reported. Binsen Tang, the company's founder, told a conference that he is targeting RMB7.5 billion in 2021. Genki ranked first in soft drinks category on both Tmall and JD.com in China's November 11 Single's Day shopping festival last year.
Tasogare secured RMB300 million in Series B funding led by Qiming Venture Partners and Yijing Capital. Shenzhen Qianhai Xingwang Investment, InvesTarget, and Bu’er Capital are among its other backers.
The company had sold more than 300 million cups of coffee as of year-end 2020. Raw materials are sourced from Japan intricate procedures are followed to ensure consistently high product quality, including using only seasonal fresh beans, an eight-hour "dripping" extraction process, and three layers of film to shield incoming light.
“Chinese consumers have started seeking out higher-quality coffee products," Yijing said in a statement. "Tasogare selects high-quality coffee beans from origin and leverages overseas technology to bring consumers the ultimate cost-effective product. We believe it will soon grow into a leading domestic coffee brand."
A host of new consumer brands are catching on in China by virtue of products that resonate with the younger demographic. At the same time, technology has removed traditional barriers to entry such as distribution infrastructure and marketing spend.
Several food and beverage brands have received VC funding. They include coffee brand Saturnbird, oatmeal specialist Wangbaobao, and instant noodle player Baijia Food.
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