The chain that distinguishes itself for its ‘healthy coffee' has grown to more than 10,000 outlets just five years after its founding

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The fast-growing Nowwa Coffee chain has raised tens of millions of dollars in its Series C funding round as it rapidly carves out a space in China's coffee market. Investors in the latest round, worth "hundreds of millions of yuan," included Legend Capital, Oris Fund, Meridian Capital, Challenjers Venture, V Star Capital and GSR Ventures, according to Chinese media reports last week.

The funding was the biggest in China's catering industry in the last year, according to one of the reports. No valuation was given.

Nowwa has grown at lightning speed since its founding, and had more than 10,000 stores in 300 cities at the end of last October, according to its website. At the height of its rapid expansion, the company opened as many as 1,800 stores in a single month, according to a Chinese media report. In addition to its offline stores, the company also sells over popular online channels including Tmall and Douyin, China's version of TikTok.

By comparison, leading Chinese coffee chain Luckin (OTC:LKNCY) was about three times Nowwa's size with 29,214 stores at the end of last September, and has a current market value of $9.3 billion. Global leader Starbucks (NASDAQ:SBUX) had about 41,000 stores at the end of last September, and has a market value of about $100 billion.

Nowwa, whose name derives from "Nowadays," is trying to set itself apart from the crowd by positioning the chain as a provider of "healthy coffee." Its orange-and-white themed stores distinguish their products with clear labeling for their low sugar, fat and calorie contents.

The company began roasting its own coffee beans last year at a custom-built plant, and has laid the foundation for its expansion with a network of 15 production and distribution centers across China. Most of its stores are currently in China, but it has also started expanding abroad with shops in Australia and Southeast Asia. Part of the money from the latest fundraising will be used to continue that expansion, as well as for brand building, product development and supply chain upgrades.

Founded in 2019 and now based in Shanghai, the company is headed by co-founder and CEO Guo Xingjun, whose previous experience includes positions at Ele.me, one of China's top two takeout dining services, as well as Samsung and Pfizer, according to his LinkedIn page. The company's team includes people from throughout the catering and tech industries, with backgrounds at internet giants Alibaba and ByteDance, as well as Yum China, McDonald's, Starbucks and Nestle from the food sector, according to the page.

China's coffee market has substantial and still‑growing potential, supported by rapid volume growth, rising disposable incomes, and urbanization that is expanding the middle‑class consumer base able to afford daily coffee consumption. Nowwa and its rivals are capitalizing on a market valued at an estimated $4.24 billion in 2025, which is projected to grow at about 5.8% annually to nearly $6 billion by 2031, according to Mordor Intelligence.

Nowwa's drinks are in the middle to more value-oriented end of China's range, typically selling for 9.9 yuan to 15 yuan before discounts.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.