Home-brew bubble tea business Bubble Tea Club has raised $1.1 million in equity crowdfunding just a year after launching, as co-founders Jenny Le and Pam Yip gear up to take their wildly successful lockdown business global.
Le and Yip founded the business after they both lost work during the Melbourne COVID-19 lockdown early last year. As bubble tea lovers themselves, they created a DIY kit for creating the sweet treat at home, bringing prices down to as little as $1.75 per serve, compared to between $7 and $9 in stores.
Taking into account the cost of delivery during lockdown, some people had been paying up to $12 for their bubble tea fix, the founders claim.
To say their idea took off is an understatement. Within less than 12 months, Bubble Tea Club had brought in more than $2 million in revenue, attracted more than 30,000 customers, built out a team of 20 people and moved into a huge warehouse to manage volumes. The founders have also taken part in the Atto accelerator program.
Now, they’re seeking to raise up to $2 million in funding to take the business to the next level.
The Birchal raise hit its minimum target of $500,000 in just 44 minutes. At the time of writing, it has raised more than $1.1 million from 661 investors, with 12 days still to go.
The campaign also had the highest number of expressions of interest ever seen on Birchal, with just shy of 3,000 people registering their interest before the campaign launched.
That smashed the previous record set by women-only rideshare service Shebah, which attracted 2,466 EOIs, before going on to raise a record-breaking $3 million.
“We’re ecstatic,” Le tells SmartCompany.
“It doesn’t feel real to be honest.”
So far, most of Bubble Tea Club’s revenue has gone back into stock, Le explains. While the business is cash-flow positive, the founders are looking for the funds they need to scale further, faster.
This funding will be invested into marketing and developing new products and flavours.
Le and Yip are also gearing up to take Bubble Tea Club to new markets, starting with the US, the UK and Canada. They have already soft-launched, and proven there is demand.
“The next step to us is also getting the right people on board,” Le says.
“We know that is very important at this stage, before we go international.”
Le and Yip admit they did consider going down the venture capital route — even receiving a term sheet at one stage.
But this has always been a business focused on its community — it’s way the word ‘club’ is in the name — and it made sense for the founders to invite people to be part of the funding journey.
“At the end of the day it was coming down to our values, and what our mission was,” Yip explains.
Time for tea
This is a business born out of COVID-19, and out of necessity.
Le was stood down from her job as an optometrist last year. Yip, a serial entrepreneur in the hospitality sector, also found herself suddenly without work.
The pair were throwing around all kinds of business ideas, she says. They weren’t thinking about the future or building a global empire; they were simply trying to survive. As Yip says, they started with “a sense of urgency”.
In part, they attribute the runaway success of their social media marketing strategy, which is focused on sharing the business’ story and inviting people to share pics, videos and other bubble tea-based content.
This is one of Yip’s areas of expertise, and she was able to tap into communities on Facebook, for example, where people all over the world were joking about not being able to access bubble tea during the lockdowns.
“People were auctioning it as a joke in Singapore for $2,000 to $3,000,” she recalls.
Bubble Tea Club now has more than 24,000 followers on Instagram and more than 14,000 on Facebook.
But, for the most part, Yip suggests the business has taken off because it’s meeting demand in an underserved market. There is no other way to make bubble tea at home, she notes.
“And people actually really wanted it.”
Credits to: smartcompany.com.au