Gong Cha secures private-equity investment to boost global expansion
International private equity company TA Associates will take an undisclosed stake in fast-growing bubble-tea chain Gong Cha.
The investment is being made through TA Associates’ Hong Kong office, with settlement expected in early October. The value of the investment has not been revealed.
Gong Cha’s South Korean operator will also participate in the capital raising.
Gong Cha has more than 1000 stores in 17 markets, including Singapore, South Korea, Japan, Taiwan, the Philippines, Malaysia, Mexico, Australia, Canada, Vietnam, the UK and the US. The company was founded in 2006 in Kaohsiung, southern Taiwan.
Edward Sippel, an MD at TA Associates and co-head of Asia operations of TA Associates Asia Pacific, said his company’s involvement in the brand will help grow the Gong Cha brand in new and existing markets.
“Gong Cha [is] a high-growth business that is among the world’s most-recognised tea brands. We are incredibly impressed with how successfully the management team has grown Gong Cha into such a profitable, global business. We will work closely with management in supporting the company’s franchise partners to further Gong Cha’s strong business model,” said Sippel.
Gong Cha’s main offering, Taiwanese-style bubble tea, is sweet milk tea infused with pearl-shaped tapioca. The company also offers a variety of seasonal and specialty tea-based drinks. Through a primarily franchise model, Gong Cha reaches consumers through a variety of retail store formats, including urban and suburban stores, as well as take-out shops, mall-based stores and kiosks, often in high traffic areas such as train and metro stations.
“We welcome TA Associates as investors in Gong Cha,” said Euiyeol Kim, CEO of the Gong Cha Group. “With its scale, large capital base and global footprint, TA is an ideal partner for Gong Cha at this stage in our growth. TA offers the truly deep global resources and experience that will help us further strengthen our market position and allow us to even more effectively build our leading global tea brand.”
Peter Rodwell, newly appointed executive chairman of Gong Cha, said the brand’s success was the result of the management team’s persistent customer-centric focus on quality, innovation and service.
“I am confident that with TA’s long history of building value in growing businesses, we are poised to bring Gong Cha’s quality tea products to many more consumers around the world.”
Rodwell joins Gong Cha with more than 30 years of retail food-and-beverage and franchising, including leading McDonald’s expansion across Asia-Pacific and the Middle East.
Michael Berk, an MD at TA Associates, said the global tea market has enjoyed steady growth over the past several years, and milk tea, including bubble tea, remains a staple beverage across Asia and increasingly around the world.
“Globally, the tea market is estimated to be larger than that of coffee, with continued expected growth. Given these market dynamics, we believe that Gong Cha is very well-positioned to further expand the company’s presence and brand throughout the world.”