Trade relations between the U.S. and China may be a bit tense, but that hasn’t stopped a China-based teahouse chain from filing for an initial public offering here.
Chagee Holdings Ltd., parent to a Shanghai-based teahouse chain with more than 6,400 units across Asia, filed for an IPO earlier this week seeking to raise $100 million, though the date of the offering has not yet been set. The company seeks to trade on the Nasdaq with the ticker symbol CHA.
Chagee is a beverage concept founded in 2017 offering freshly made tea drinks like tea lattes, pure tea, iced lemon tea and tea frappes.
The brand was inspired by the rise of international coffeehouse chains that made coffee drinking both a worldwide lifestyle and a social concept, the company said in filings with the U.S. Securities and Exchange Commission (SEC).
Chagee reported a roughly 83% increase in its unit count between 2023 and 2024, reaching 6,440 as of Dec. 31, mostly in China, where it is the largest teahouse chain. About 169 are company-owned and the rest are franchised, though the company manages about 229 of the franchised locations.
Chagee’s revenues grew from about $344 million in 2023 to $1.7 billion last year.
In its IPO filing, Chagee said proceeds would be used to fund expansion, and that apparently includes in the U.S.
The first U.S. Chagee location is coming this spring to Los Angeles, where an outlet is reportedly opening in a Westfield mall. The company’s U.S. headquarters is in Irvine, California, and the plan for expansion here will include company-owned units, according to its LinkedIn page.
The move comes as Luckin Coffee, another China-based beverage company, is also plotting another attempt to conquer America. Its first U.S. location is reportedly coming to New York City sometime this year.
Also founded in 2017, Luckin has grown rapidly in Asia, outpacing Starbucks there. Luckin later filed for an IPO in the U.S.—before any units had opened here—but later was delisted after revealing it had inflated its earnings data.
Luckin filed bankruptcy and emerged with new financing and management, and carried on its growth path, more than doubling between mid-2023 and the end of 2024, when it had 22,340 units.
Luckin, however, faces a lot more competition in the coffee space.
Tea, on the other hand, has tremendous global potential, Chagee contends in its SEC filing.
It’s the second largest non-alcoholic beverage category worldwide with more than $467 million in sales and the potential to reach about $602 billion by 2028, with freshly made tea drinks projected to reach $122 billion.
Tea drinking is on the rise in part because the base of consumers is expanding, and there’s a potential to capture coffee drinkers because tea is more affordable and has a more healthful profile, Chagee contends in SEC filings.
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