Creador takes 30% stake in Malaysia tea brand Tealive

11.06.21 / Author: Justin Niessner

Malaysia-based middle-market private equity firm Creador has paid an undisclosed sum for a 30% stake in local tea shop operator Tealive.

Creador is investing via its fourth flagship fund, which closed at $595 million in 2019 and deploys in a range of $30-80 million. It is taking its position entirely via the purchase of secondary shares from the owners, which will keep the cash. Growth funding will be sourced from profits.

Launched in 2017, Tealive claims to be the regional leader in its category with 650 stores generating MYR307 million ($75 million) in revenue and MYR58 million in profit during financial 2020. Operational stability during COVID-19 has been attributed to a successful digital strategy, which includes online order options via GrabFood, Foodpanda, and DeliverEat, as well as a loyalty app and e-gift voucher service.

The company positions itself as a modern lifestyle brand with colorful shop designs and an international-style menu spanning milk tea, smoothies, chocolate, and coffee. A few overseas outlets have been opened, but income is generated almost entirely within Malaysia. There are plans to build out the ASEAN presence and hit the 1,000 stores mark in three years.

“The made-to-order tea market in Malaysia has been growing over 20% in the last few years and beverage chain per million population remains underpenetrated when compared with peers in the region and developed countries,” Brahmal Vasudevan, Creador’s founder and CEO, said in a statement.

Tealive is Creador’s second investment in the food and beverage restaurant space after Malaysia-based OldTown White Coffee. Creador acquired a 10% stake in OldTown for $15 million in 2012 and generated a 2x return and IRR of 101% upon exit the following year.

Tealive will also be one of the last investments for Creador’s fourth fund. Fund V is currently in the market with a target of $600 million.

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