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Starbucks partners with Sequoia Capital to make investments in mainland China
Starbucks Corp. has struck up a partnership with Sequoia Capital’s China investment arm to make strategic investments in mainland China.
A company best known for its American coffee teaming up with the most famous venture capital firm in Silicon Valley is arguably odd, but there is some logic to the deal announced today.
Starbucks is an aspirational brand in parts of Asia. Coffee was never really a thing in mainland China until Starbucks came along and made it a thing. In 2020, Starbucks can be found across mainland China even in more remote places and it has become synonymous with coffee in the Middle Kingdom.
Under the deal, the coffee company and the venture capital firm are joining to make co-investments in “next generation” food and retail technology companies.
“Starbucks has an insatiable appetite for innovative ideas that augment the Starbucks Experience and keep it at the forefront of China’s retail landscape,” Belinda Wong, chairman and chief executive officer of Starbucks China, said in a statement. “China’s vibrant environment is a rich ground for entrepreneurship that has seen the emergence of many local innovators that we hugely admire. The partnership enables Starbucks to tap into the most dynamic Chinese technology entrepreneurs in order to delight our customers with meaningful innovations created in China, for China.”
According to Forbes, Starbucks announced last month that it would build a “Coffee Innovation Park” in China to “extend its global roasting network and lay a foundation for continued business growth and development.”
Coffee in itself is not Sequoia’s main interest, however, with the deal coming down to digital technology and e-commerce. Mainland China has a market of 1.393 billion people and is a country where even beggars and buskers take payment via QR Code made by either Alipay or WeChat. Starbucks has a strong foothold in China and is a rare fully U.S.-owned company that can tap into that market. Traditionally, most Western companies operating in mainland China are forced to partner with local firms.
Photo: Wikimedia Commons
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