It has been more than a month since the Chinese business of Canadian coffee chain Tim Hortons went public on the Nasdaq, but so far, the coffee company that is trying to become the second Starbucks has not performed well in the US stock market.
On October 28, Tim Hortons China’s share price was $3.55. Not only ordinary market investors, but also Cartesian Capital Group, the largest shareholder behind Tim Hortons China, were disappointed.
In 2018, Tim Hortons’ parent company Restaurant Brands International and Cartesian Capital Group jointly established the Chinese business. In February 2019, Tim Hortons China opened its first cafe in Shanghai. Its investors included Tencent, Sequoia Capital and Eastern Bell Capital.
Cartesian Capital Group, a Chinese company owned by Peter Yu, won the rights to use the Burger King franchise in China in 2012 before operating Tim Hortons China. Earlier, the company was one of the shareholders of Yanjun Automobile, which was the first dealer of BMW and BMW MINI in North China and was acquired by Baoxin Auto in 2012.
As a fund management company, Cartesian Capital Group is based in New York. In terms of special purpose acquisition companies (SPAC), Cartesian Capital Group has built two blank-check companies. One is Cartesian Growth, which has announced its merger with two asset management companies, Alvarium and Tiedemann, and its share price is still around $10. The second one is RENEU which successfully listed on Nasdaq in May this year. This company still exists as a blank-check company, and its share price fluctuates around $10.
On October 30, an investor who understands the SPAC process told Chinese media Star Market that “Tim Hortons China is still in the expansion stage and needs to raise funds quickly to supplement and consolidate cash flow. SPAC is the best listing method.” Tims Hortons China’s partner is Silver Crest and when it went public in January 2021 it successfully raised $345 million.
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In the listing documents, Tim Hortons China regards Starbucks, Costa Coffee, Peet’s and Luckin Coffee as rivals, so it obviously defines itself as a world-class brand. But in the eyes of some people in the industry, it can hardly surpass Luckin Coffee, let alone Starbucks.
Tim Hortons China does not have scale advantage at present. Although it cooperates with WeChat’s mini programs and Meituan along with its own stores and members online, its coverage isn’t enough. Luckin Coffee has more than 7,000 stores, and most of them are for take-away services while Tim Hortons China had only 418 stores as of May 31 of this year.