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

Time Coffee's Stores Close Overnight

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 closing stores en masse? According to reports, several Time Coffee locations — including the one at Shenzhen Kexing Science Park — have posted closure notices and cleared out all their items, leaving only empty storefronts.

Calls to multiple Time Coffee stores went unanswered, showed service suspension, or reached a disconnected line. Tianyancha, a business information platform, shows that Wuxi Xini Technology Co., Ltd., the company behind Time Coffee, is still listed as active, but its phone remains constantly busy. As of now, Time Coffee has not responded to the matter.

The Business Journey

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

The company began with a subscription model through WeChat mini-programs. Once consumers activated the service, they were charged automatically each month like a membership, and Time Coffee shipped products after payment. At that time, its main products were low-priced premium drip coffee bags.

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

In 2020, Time Coffee opened its first offline store in Shenzhen. After the Spring Festival in 2021, it opened five more within two months. At the time, the company said it expected to have 50 stores by the end of 2021. According to 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 five financing rounds. These 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 a new round of nearly 100 million yuan, with funds mainly used to accelerate offline store expansion, brand marketing, and ongoing development of new online and offline products.

After that nearly 100 million yuan round, Time Coffee accelerated its move from online to offline. In the second half of 2021 it opened more than ten stores across Shenzhen, Guangzhou, and Foshan. The exact peak number is unclear, but data left in Time Coffee's mini-program showed 8 stores in Shenzhen, 3 in Guangzhou, and 1 in Foshan — 12 in total.

It was once reported that many investment institutions valued a single Time Coffee store at over 100 million yuan. Now that the company has retreated to online operations, that valuation faces significant shrinkage. Without further financing, a broken capital chain will be hard to avoid.

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 shows that only the Foshan Lingnan Xintiandi store remains operational.

E-commerce channels, however, are still running normally, and the company appears to be returning to the new-retail track with a focus on online operations.

Looking at the financing patterns of coffee brands in recent years, new brands raise funds more frequently. Brands like Time Coffee and Sumida River rely on financing, then open up promotion online before gradually entering the coffee market competition. Emerging coffee brands often need to grow rapidly, which demands large capital investment. Once subsequent funding is cut off, they collapse quickly.

Industry Challenges

Time Coffee is not alone in its trouble. As investment direction in the coffee sector shifts, many brands are seeing the amount and frequency of funding fall. Fish Eye Coffee, for example, closed its last offline store in mid-July this year and returned fully to online sales.

Tims China, which only listed on NASDAQ on September 30th this year, has seen its value drop 64% — a loss of 100 million yuan. Its valuation has also been cut from the initial 1.4 billion to 497 million US dollars.

Seen this way, it is still the established names such as Nestlé and Starbucks that hold up. They may not be trendy, but they have accumulated stable customer bases and industry experience, and they retain strong resilience under macroeconomic pressure.

Image source: Internet

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