Will the Manner Coffee IPO Reshape Specialty Coffee in China?

Manner Coffee is preparing a Hong Kong initial public offering that could take place as early as next year, with a reported valuation of up to US$3 billion. The Shanghai chain declined to comment, a shift from earlier flat denials, and has reportedly approached several investment banks about raising hundreds of millions of dollars.

Founded in 2015 as a 2-square-meter Shanghai shop, Manner grew on affordable specialty coffee and a community store model, backed by Capital Today, Meituan Dragonball, ByteDance and Temasek. As of November it ran 2,234 stores nationwide, ranking sixth in scale and the only top-six brand besides Starbucks China under direct operation.

Recently, multiple media outlets including Bloomberg reported that chain coffee brand Manner Coffee is preparing for a Hong Kong listing, potentially debuting on the Hong Kong Stock Exchange as early as next year with a valuation expected to reach US$3 billion. Manner responded with "no comment," a departure from its previous attitude of outright denial. Looking back at Manner's development journey, it started from a 2-square-meter shop in Shanghai in 2015, rising rapidly with a strategy of making specialty coffee affordable and a community store model, and successively attracted capital from Capital Today, Meituan Dragonball, ByteDance, Temasek, and others. As of November, Manner had 2,234 stores nationwide, ranking sixth in scale, and among the top six brands, it is the only one besides Starbucks China to operate under a direct-operated model. Against the backdrop of competitors' successive moves, Manner's listing rumors have sparked widespread attention. (Recommended by Front Street Coffee)

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According to recent reports from multiple foreign media outlets including Bloomberg and World Coffee Portal, well-known chain coffee brand Manner Coffee may list in Hong Kong next year.

The reports, citing multiple people familiar with the matter, said Manner is currently stepping up work related to its Hong Kong initial public offering (IPO), and could debut on the Hong Kong Stock Exchange as early as next year.

At the same time, the people familiar with the matter also revealed that Manner has approached multiple investment banks regarding the listing, with an initial plan to raise several hundred million US dollars, and a valuation ceiling that could reach US$3 billion. However, since the relevant discussions are still at an early stage, key details such as the final fundraising size and listing timing may still change.

Looking back at Manner's growth trajectory since 2015, the brand carved out a unique path in the coffee sector with its positioning of affordable specialty coffee and its community store model, which also earned it sustained attention from the capital market. In 2018, Capital Today injected 80 million yuan into Manner, and with its support, Manner began its path of scaled expansion from a small 2-square-meter shop in Shanghai, but later parted ways with Manner due to "disagreements" with brand founder Han Yulong.

After that, institutions including Meituan Dragonball Capital, ByteDance, and Singapore sovereign fund Temasek successively became investors in Manner. In 2021, Manner completed a US$200 million financing round solely invested by Meituan Dragonball Capital, at which point its market valuation was already close to US$2 billion.

Also in 2021, Manner, which was highly sought after by capital, was first reported to be about to list in Hong Kong. Media reports at the time said Manner planned to list on the Hong Kong Stock Exchange in 2022, expecting to raise US$300 million, sparking widespread attention to its future direction. However, the news was quickly personally denied by brand founder Han Yulong, who said there were no such plans.

Interestingly, although Manner once again responded quickly after the news of a "Hong Kong listing as early as 2026" emerged this time, unlike its direct denial last time, in response to the listing rumors reported by the media, Manner said, "The company will not comment on Hong Kong IPO rumors."

Among many coffee brands, Manner ranks sixth in store scale. Data from Zhaomen Canyan shows that as of November 13, Manner had a total of 2,234 stores nationwide. Compared with the top five — Luckin (27,930), Cotti (15,323), Starbucks China (8,283), Lucky Cup (5,784), and Nowwa (4,252) — its store count is not particularly large, and the gap with competitors is relatively obvious. But among the top six brands, only Manner and Starbucks China use a direct-operated model.

However, times have changed. Starbucks China has reached a partnership with Boyu Capital, while Luckin intends to make another bid for a listing on the US main board. To the outside world, the successive moves by competitors may have brought a sense of crisis to Manner. Therefore, in the face of this round of hearsay about a listing, Manner did not deny it outright with a clear stance, which seems to suggest it will take some action to respond to today's volatile coffee market.

Image source: Internet

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