When several VCs collectively withdraw from their joint portfolio companies and major equity changes occur, you may quickly associate words like "abandonment" and "escape", such as whether the company has business problems, whether these VCs have decided to trigger the buyback clause due to exit pressure, and whether VCs have lost confidence and decided to sell old shares at a discount.
But after the second half of 2024, you may need to look at this matter more positively, and a large wave of F&B consumer companies have begun to seriously prepare for listing.
First of all, on June 14, Hunan Chayue Cultural Industry Development Group Co., Ltd. (hereinafter referred to as "Chayan Yuese"), the main body of the company, underwent industrial and commercial changes, and the funds of Shunwei Capital, Wuyuan Capital, Source Code Capital, Yuansheng Capital, Tiantu Investment and other institutions withdrew from the ranks of shareholders, which is rumored to be to build a VIE structure and prepare for overseas IPOs.
Later, on June 24, the State Administration for Market Regulation publicly disclosed the information announcement of the acquisition of the equity of Shandong Shuaike Pet Products Co., Ltd. (hereinafter referred to as "Shuaike Pet") by Advent Capital and Boyu IV. At this time, it has just been a year since Shuai Ke Pet entered the listing counseling filing and counseling acceptance procedures, and according to the regulations, the company needs to submit a listing application within 12 months after the completion of the general acceptance work, and if it is more than one year, it will be necessary to re-perform the counseling filing and counseling acceptance procedures, so this move is also interpreted as Shuai Ke Pet through the adjustment of the capital structure, perhaps a longer exit period, in order to re-plan the listing schedule.
In recent days, the well-known Internet celebrity restaurant chain brand Kuafu fried skewers has become the new protagonist.
According to the information of the industrial and commercial media, Xiamen Wanpisi Food Technology Co., Ltd., an affiliated company of Kuafu, has undergone industrial and commercial changes, and the Guangzhou Jue Zhi Phase II Equity Investment Fund Partnership (Limited Partnership) under the Jue Ye Fund (Juewei Food and Ele.me Joint Investment Fund), as well as Shanghai Maihe Catering Management Co., Ltd. and Nanjing Huaying SME Development Fund Partnership (Limited Partnership) have withdrawn from the ranks of shareholders, and the company's registered capital has been reduced from about 549 million yuan to about 280 million yuan. Under the influence of many online celebrity catering brands such as Shanghai Auntie, Bawang Chaji, and Chayan Yuese, it has been rumored that they are in the preparation stage for listing and have even completed their listing, which is also interpreted as preparing for overseas listing in advance.
A side example is that between 2018 and 2024, a total of 6 rounds of financing have been completed before and after "Kuafu Fried Skewers". According to the A+ round and A+ round that disclosed the approximate financing amount, combined with the proportion of capital contribution disclosed in the equity information, the overall financing scale exceeded 500 million, and the degree of asset accumulation in the project can be imagined, and it is indeed theoretically necessary to go to the secondary market to "loosen" the time node for investors.
In addition, in February this year, Yuan Zelu, the founder of Kuafu Fried Skewers, also publicly responded to the company's listing plan in an interview with a financial reporter from China.com, and he gave the statement that "there is no such plan at present", and the main goal at present is to "deepen user needs, improve the ability to turn products into commodities, and hope to build Kuafu Fried Skewers into an excellent enterprise like McDonald's". However, combined with the specific promotion plan they announced before, that is, it is expected that the number of Kuafu fried skewer stores will be expanded to 5,000 in 2024 and more than 10,000 in 2026.
However, compared with the popular fried chickens such as Chayan Yuese and Bawang Chaji, there seem to be two "special circumstances" worth paying attention to.
The first "special case" is reflected in time.
The absolute fund that withdrew from the ranks of shareholders in this round is not the old shareholder, but the new shareholder of the latest round of financing. The round of funding took place in February 2024, when the fund co-led with Joy Capital – in other words, the fund chose to "exit" after only four months of investment.
And before this round of financing, the A++ round of financing of Kuafu fried skewers took place on October 22, 2021. In other words, a chain restaurant brand that is in the stage of rapid expansion has two rounds of key financing separated by more than 800 days and more than 2 years, which obviously brings a lot of uncertainty in between. In fact, in the official announcement of the B round of financing, Yuan Zelu did talk about how he "gritted his teeth and invested tens of millions" to seek digital transformation after the new consumption investment boom ebbed in 2021.
The second "special case" is reflected in the franchise model.
Regarding the "franchise controversy" of Kuafu's fried skewers, it has not been broken since the brand became popular to this day.
Proponents believe that "fried skewers" are the "lipstick" of food and beverage – small portions, flexible combinations, low dining environment requirements, and no need for a table, chair and bench, but it has a Maillard effect and can get great satisfaction - and seems to be very adaptable to the requirements of consumers with "reduced consumption".
For example, in September 2023, major media have reprinted a report entitled "Kuafu Fried Skewers Single-day Revenue Exceeds 100,000, Creating a Miracle of Industry Efficiency", the author wrote "Kuafu Fried Skewers Nanjing Jiangning Longhu Longwan Tianjie Store opened", "The single-day revenue of the store exceeded 100,000 yuan during the opening of the store, refreshing the historical record of the Kuafu fried skewer brand since its inception". Kuafu's revenue of 2.1 billion in 2022 and 3.6 billion in 2023 can also prove to a certain extent that the fried skewers have indeed stepped on the "lipstick effect".
However, there are considerable voices on platforms such as Douyin, Zhihu, and Xiaohongshu that the performance of Kuafu fried skewers in terms of franchise returns is not excellent. In addition, in March this year, Hubei Economic Television's special program "315 We Are in Action", Kuafu fried skewers were exposed to food safety and other problems, which seemed to be attributed to the "franchise model", because "the owners and managers of each store are different".
Finally, as a reference, one of the main competitors of Kuafu's fried skewers, Sister Xi's fried skewers, announced in the first half of last year that they would start the IPO process and enter the IPO counseling period, and would sprint to "the first share of fried skewers". Judging from the data, at that time, Sister Xi's fried skewers were almost "a copy of Kuafu's fried skewers": the annual store operation exceeded 2 billion, 3 rounds of financing were quickly completed within 1 year, the cumulative financing scale reached 370 million, the number of stores was rapidly expanded to more than 2,000 within 4 years, the founder was a serial entrepreneur who started more than 11 times, and the franchise model was also open......
Is the skewer market really big enough to pay for two similar stories? Does capital really believe that it sees enough potential in the fried skewers? I don't know, I can only be sure that this year's consumer investors really need dopamine too much.