NEW YORK - In February last year, a tiny coffee store with red neon signs opened at Gramercy Park, one of the most idyllic neighborhoods in New York City. The shop, labeled About Time Coffee, soon spawned four other prime locations in downtown Manhattan, peddling iced boba coffee that’s suddenly a trend on TikTok and Instagram.
This is not your typical neighbourhood coffeehouse, but a tech-savvy start-up backed by some of China’s biggest venture firms.
Investors including ZhenFund and IDG Capital’s Chinese arm have made bets on the nascent New York coffee chain hatched by Dai Wei, the controversial founder of Chinese bike-sharing start-up Ofo.
Mr Dai, in his early thirties, is the face of China’s biggest tech bubble of recent times, when investors poured billions of dollars into companies renting dockless bikes with no clear business model. In 2018, Ofo ceased operations after funding dried up, leaving its iconic yellow bikes piling up on Chinese streets. He has since largely stepped away from the public eye.
His comeback in the United States, which hasn’t been previously reported, is another example of China’s embattled tech industry turning outward for growth, hoping to ride the coat-tails of video sensation TikTok and retailer Shein. For Chinese start-ups and their venture backers who endured two years of regulatory crackdowns and Covid-19 restrictions, the “Copy-from-China” tactic has grown increasingly alluring, as they seek to replicate tried-and-true business models far from home, in markets like South-east Asia and the US.
“We have a proven model from China,” About Time chief executive officer Marian Chen said in an interview. “We sell coffee that tastes better but is cheaper than Starbucks.”
Despite Ofo’s demise, Mr Dai has again scored funding from investors who put faith in him, including IDG, ZhenFund, and Beijing-based Will Hunting Capital, an early backer of the bike-sharing start-up. About Time has so far raised more than US$10 million (S$13.4 million) at a valuation of US$40 million, Ms Chen said.
While Mr Dai isn’t involved in the day-to-day operations of About Time, he helped build out the team for the retailer and set up meetings with investors, Ms Chen said. “He’s the one who glued us together.”
Mr Dai, who Ms Chen says is a minority shareholder, declined a request for an interview.
About Time hopes to woo New Yorkers with some Chinese recipes. The firm follows the technology-driven business model of Luckin Coffee, which overtook Starbucks in China in the span of few years before it was plagued by an accounting fraud. Like Luckin, About Time handles orders and payments via its mobile app, and collects customer data to tailor discounts and coupons. The lower pricing is also a big draw: Its signature iced boba coffee – fresh made and sealed into cans – costs US$4, when Starbucks serves average cups at around US$5 in the US.
“Order online,” a board outside its Gramercy Park shop advertises, “First five drinks on us.”
The aggressive pricing appears to be winning over younger customers. On a recent Thursday afternoon, at least seven students from the nearby Baruch College hit the Gramercy store in 15 minutes.
Among them was Mansoor Wardak, a 22-year-old finance major and About Time regular since he got a text promo to sign up on its app for a free coffee. “I don’t want to pay US$7 for Starbucks,” he said. BLOOMBERG
