Valued at 100 Million Per Store, the TIMECAFE Brand Suddenly Closes All Locations Overnight?!

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Sudden Closure of Time Coffee Stores

Recently, a user on Xiaohongshu revealed that Time Coffee had closed all of its dozen offline stores overnight.

Time Coffee, which had secured nearly 100 million yuan in strategic financing just last year, is now massively closing its offline stores? According to reports, several Time Coffee stores, including the one at Shenzhen Kexing Science Park, have posted closure notices and removed all items, leaving only empty storefronts.

Calls to multiple Time Coffee store locations went unanswered, showed service suspension, or were powered off. Tianyancha (a business information platform) shows that Wuxi Xini Technology Co., Ltd., the company behind Time Coffee, is currently in an active status, but their phone remains constantly busy. As of now, Time Coffee officials have not yet responded to this matter.

Time Coffee's Business Journey

Like Three Squirrels and Yongpu, Time Coffee was also a significant player among "web-native" brands of premium instant coffee. Time Coffee was founded in May 2019 by Fan Ruoyu, who reportedly has extensive experience working for internet companies, having previously worked at internet enterprises such as Uber and Didi. Not only the founder but also the team members behind him had similar backgrounds.

The company initially started with a subscription model through WeChat mini-programs. Simply put, after consumers activated the subscription service, they would be automatically charged monthly like purchasing a membership, and Time Coffee would automatically deliver products after payment. At that time, the company's main products were low-priced premium drip coffee bags.

After entering Tmall in December 2019, Time Coffee launched a new product called "Donut Drip Coffee" based on traditional drip coffee bags. Compared to traditional drip coffee bags, the new product adopted a "hemispherical filter bag" design, with the donut shape attracting the attention of young consumers. Additionally, Time Coffee also launched freeze-dried instant coffee, premium coffee liquid extracts, and other products.

In 2020, Time Coffee opened its first offline store in Shenzhen. After the Spring Festival in 2021, five new stores were opened within two months. At that time, Time Coffee stated that it expected to have 50 stores by the end of 2021. According to statistics from Tmall's Business Intelligence platform, as of March 2021, Time Coffee ranked first in domestic drip coffee bag sales on Tmall.

Financing and Expansion

Public information shows that in the past three years, Time Coffee secured a total of 5 financing rounds. This included seed and angel rounds in 2019, and Series A and Series A+ rounds worth tens of millions of yuan each in 2020. In July 2021, Time Coffee announced the completion of a new financing round of nearly 100 million yuan, with funds primarily used to accelerate offline store expansion, brand marketing, and continuous research and development of innovative online and offline products.

After securing this nearly 100 million yuan financing, Time Coffee accelerated its pace of moving from online to offline store openings. In the second half of 2021, Time Coffee opened more than ten stores in Shenzhen, Guangzhou, and Foshan. The peak number of stores is unclear, but according to data remaining from Time Coffee's mini-program, there were 8 stores in Shenzhen, 3 in Guangzhou, and 1 in Foshan, totaling 12 stores.

It was once reported that many investment institutions valued a single Time Coffee store at over 100 million yuan. Now that Time Coffee has retreated to online operations, its valuation faces significant shrinkage. If subsequent financing does not come in, it will be difficult to avoid the result of a broken capital chain.

Current Status and Market Analysis

According to the WeChat mini-program, all Time Coffee offline stores are currently in a resting state. Confirmation from Time Coffee's WeChat customer service reveals that only the Foshan Lingnan Xintiandi store remains operational.

However, e-commerce channels are still operating normally. It appears that Time Coffee seems to be returning to the new retail track, with a trend of focusing on online operations.

Looking at the financing characteristics of coffee brands in recent years, new brands have higher financing frequency. Brands like Time Coffee and Sumida River rely on funds obtained from financing, then open up promotion online, and gradually enter the competition in the coffee market. Emerging coffee brands often need to grow rapidly, which requires large amounts of capital investment. Once subsequent funding is cut off, they will quickly collapse.

Industry Challenges

Time Coffee is not the only one in trouble. As the investment direction in the coffee sector changes, many coffee brands are seeing continuous reductions in the amount and frequency of investment they can obtain. For example, Fish Eye Coffee closed its last offline store in mid-July this year, fully returning to online sales.

Tims China, which only listed on NASDAQ on September 30th of this year, saw its capital lose 64% - 100 million yuan for a 64% loss. Tims China's valuation has also been reduced from the initial 1.4 billion to 497 million US dollars.

Looking at it this way, it still has to be established companies like Nestlé and Starbucks. Although they may not be trendy enough, they have accumulated stable customer bases and industry experience, maintaining strong resilience under macroeconomic pressure.

Image source: Internet

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