Growth private equity firm TA Associates is to make a strategic growth investment in the Gong Cha Group (Gong Cha), a provider of premium quality bubble and milk tea.
The founders of Gong Cha Korea will participate in the investment alongside TA. Financial terms of the transaction, which is expected to close in early October, have not been disclosed.
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. Utilising primarily a 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. There are more than 1,000 Gong Cha stores in 17 countries across the globe, including Korea, Japan, Taiwan, the Philippines, Malaysia, Mexico, Australia, Canada, the United Kingdom and the United States. Gong Cha was founded in 2006 in Kaohsiung in southern Taiwan.
“We are very pleased to invest in Gong Cha, a high-growth business that is among the world’s most recognised tea brands,” says Edward Sippel, a Managing Director at TA Associates and Co-head of Asia operations of TA Associates Asia Pacific Ltd. “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. We are looking forward to this partnership and helping to grow the Gong Cha brand in new and existing markets.”
“We welcome TA Associates as investors in Gong Cha,” says 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.”
“I am very pleased to join Gong Cha at this important juncture in the company’s evolution,” says Peter Rodwell, incoming Executive Chairman of Gong Cha. “Gong Cha’s success is a 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 brings more than three decades of retail food and beverage and franchising experience to the Gong Cha Group, having led McDonald’s expansion across Asia-Pacific and the Middle East.
“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,” says Michael Berk, a Managing Director at TA Associates. “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.”
