This summer, a mutton skewers support a valuation of more than 4 billion

This summer, a mutton skewers support a valuation of more than 4 billion

This summer, the “Lu Chuan Er” industry welcomed a wave of new guests, and their identities were called investors.

The main purpose of this wave of investors and guests is obvious: not to eat strings, but to bring capital into the market and become shareholders. For this purpose, at present, the performance of investors is mainly divided into two types: those that have already taken the shots and those that are still under observation.

First, let’s take a look at what has already been shot: on July 12, 2021, the old Beijing barbecue brand Yongdingmen electric grilled skewers officially announced that it has completed an angel round of financing of nearly 10 million yuan, which is jointly funded by Meihua Ventures and Taihe Dingchuan . According to China Investment News, another barbecue chain that does not want to be exposed will also close a round of financing recently, and investors behind it are eagerly rushing.

The second is still under investigation. VC investor Wang Zijun told China Investment Network that in the past few months, he has been chatting with star players on the barbecue track, but he has not made any shots due to various reasons. “We are still watching, but we still haven’t met The store model that shines in front of you”.

One thing that needs to be pointed out is that the barbecue shop brands that Wang Zijun said “not much interest” did not include a long time ago. The reason for not investing is that “you can’t get in at all.” It is reported that the latest round of valuation long ago has exceeded RMB 4 billion. The chance of small and medium VCs getting tickets is obviously slim.

1. VC/PE chased and cast, “kneeling for a long time and can’t get in”

At the moment, the topic of capital’s pursuit of offline chain catering is not surprising. For every hot catering category, investors can tell a number of self-consistent logics for investment.

So, what about the barbecue track with the strongest pyrotechnic atmosphere: For the tall capital circle, what kind of magic is the barbecue booth under the night?

Interpretation from two aspects is the market side and the industry side.

On the market side, investors are expecting that the barbecue track will grow like a hot pot track and a Haidilao with a market value of over 200 billion. Zhang Peiyuan, the managing partner of Black Ant Capital who invested a long time ago, mentioned, “Looking far, Haidilao can be found in hot pot. We believe that a large company with the ultimate experience can also be produced in barbecue.”

In other words, the barbecue track has a large market and strong growth momentum. According to data from the National Bureau of Statistics, the scale of the Chinese barbecue market in 2019 is about 220 billion yuan. Moreover, some investors pointed out to Investment that since the epidemic, the barbecue business has recovered the fastest compared to the rest, and the store attendance rate is much better than that of other catering categories.

Relevant data directly confirms this point. According to “China Catering Big Data 2021”, in 2020, the volume of other categories in the catering industry will drop by 20% to 30%, but the barbecue category has grown against the trend, and its growth rate ranks first among all categories.

Wu Shichun, the founder of Meihua Ventures, also said bluntly, “The new barbecue chain is huge enough to be a unicorn.”

On the industry side, with the iteration of the scene in recent years, the open-air barbecue that was originally a street stall has gradually been standardized as an indoor operation, and the industry brand opportunities are being released at an accelerated pace. Zhonghai Investment Xu Jiacheng mentioned, “One of the prerequisites for the capitalization of the barbecue track is due to the emergence of an industry upgrade that can be branded.”

It is worth mentioning that in the barbecue track, long ago this brand can be said to be a “special presence” in the eyes of many investors, and it seems to be the best target recognized by investors in this track. More than one investor said to, “Although it was a skewers business a long time ago, the brand positioning was relatively clear and the standardization was higher.” Therefore, many investors rushed to it, “Some institutions are kneeling I can’t get in on my knees for a long time.”

For some VCs who can’t get into the top companies, based on their optimistic view of the entire barbecue track, they naturally chase some earlier opportunities. But in fact, some early barbecue projects also need to compete. An investor in a barbecue chain brand described the investment situation at the time to, “We originally wanted more shares, but unfortunately we didn’t succeed.”

2. The valuation system is divided, and the players are not the track.

Different from other hot consumer circuits, the entire barbecue circuit attracts capital’s attention, but also presents the other side of the coin-not every star barbecue chain brand, capital is willing to pay.

In the eyes of investors, the barbecue industry is no more standardized than chain noodle shops, and the stability of the store model is relatively weaker. This means that in the barbecue track, the operation and management of various brand stores are prone to unevenness. Investors bet on the excellent players on the track, not on the track.

This is why, some investors did not find a suitable bidder after looking around.

Xu Jiacheng, who has been following the offline catering business for a long time, has also seen several chain barbecue brands this year, and hasn’t made any deals until now. In his view, the barbeque business from the street to the interior is only the first step in brand chaining, and it is especially difficult to achieve the key link of true differentiation.

In essence, from the point of view of taste, it is extremely difficult to stand out on skewers on a handful of cumin and a handful of chili batter. Moreover, compared with hot pot, although the skewers supply chain has a certain technological innovation, at least the skewers link is not completely divorced from manpower.

“On the one hand, the efficiency of using a fully automatic stringer will indeed increase, but from a consumer’s point of view, the taste is really different compared to manual; Standardization is still a big problem facing this industry.”

In addition, Xu Jiacheng mentioned that from the perspective of consumer groups, it is the same traditional products entering new channels such as shopping malls, but compared to noodle shops, skewers have not attracted new people on a large scale. “Barbecue companies need to make distinct differences in brand positioning, product innovation, and atmosphere building.”

Among the various reasons that Wang Zijun did not make a move, the difficulty of offline barbecue brand differentiation has also been placed at the core. “It can only be said that this industry has ushered in an inflection point, but there is no better brand yet. Including how to differentiate barbecue companies that have now received the money, I have to raise a question mark.”

Due to the different attitudes of capital towards various projects, in terms of valuation, the barbecue track is currently in a stage of differentiation. For example, a long time ago, there was confidence to report a valuation of over 4 billion, but the valuation level of the overall barbecue track is relatively not outrageous.

Xu Jiacheng said that he will continue to pay attention to the barbecue track. “These companies can either attract new people, or the model can have major innovations.”

3. “Capital barriers are relatively not so high”

“Lamb skewers” seems to be a traditional business, but for a long time, companies on the barbecue track have been relatively open to capital.

For example, Wooden House Barbecue, in 2014, received 100 million yuan of A round of financing from Tiantu Investment; the first round of financing a long time ago was in 2018, and the investment institution was a joint venture fund initiated by Juewei Food and; The Lancet BBQ announced the completion of the angel round of financing in 2019, led by the 1898 Fund, followed by first-line fund partners such as Peking University Mingde Fund, Funiutang Catering ( Baman ) , and Tiantu Capital partner Li Kanglin.

Even the Yongdingmen electric grilled skewers, which has been established for a longer time, have recently introduced Meihua Venture Capital and Thai Fund. Wang Zijun told China Investment Network that, including the Fengmao grilled skewers, which began in 1991, is not repulsive to capital.

But in fact, compared with other offline chain brands, the weight of capital in the barbecue track is not decisive. Although the threshold of this industry is not high, it can be done with a stall, but in the early stage, “the barrier to capital is relatively low.”

The main reason is that due to the standardization process, the point expansion speed of barbecue stores cannot be accelerated with high quality. Taking Fengmao skewers from the perspective of its establishment 30 years ago, the number of Fengmao skewers is still less than a hundred stores. It is reported that Fengmao skewers plans to open 150 stores nationwide in 2025.

With a history of 13 years, there were only more than 70 directly-operated stores nationwide a long time ago, and the rate of new stores opened every year is counted as 15 stores. It can be seen that compared to the number of chain noodle shops that have to be opened at every turn, the number of store expansions of chain barbecue companies is really not worth mentioning.

In fact, a long time ago, the founder of the store, Song Ji, once bluntly said that speed is sometimes a castle in the sky. In the first few years, in order to scale up, the brand franchise model was adopted a long time ago, but soon the company entered a trough. In Song Ji’s words, “You can’t die, you can still make some money, but it’s maintained at the break-even point.”

“Just thinking about ourselves has caused us to just do standardization. If the factory wears a string and sends it over, then it is all standard, but without thinking about it will become unpalatable, which harms the interests of customers.” Song Ji once reflected . Therefore, when choosing capital, Song Ji valued the most, “to maintain full respect for his own ideas a long time ago, and not to disrupt our rhythm.”

In addition, barbecue operations have stronger regional attributes. Yongdingmen Electric Grilled Skewers CEO Wang Yu once said that it is more likely that barbecue brands can form a chain in a certain area.

In short, this matter does not seem to be the best strategy in the development of barbecue chain brands. The use of external capital to quickly grab points and use time for space is not the core of the track’s competition. To a certain extent, this track is just as Wang Zijun said, “Even if capital comes in, there is no way to speed up, because the industry’s capabilities are not yet in place.”

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