Chinese snack shop chain Lingshi Henmang has secured around 1.1 billion yuan ($155.3 million) in a strategic investment from two local snack makers.
Yankershop Food has injected 350 million yuan ($49.4 million) in exchange for a 3.3% stake in the firm while Haoxiangni Health Food has pumped in 700 million yuan ($98.8 million) for a 6.6% stake. Both snack makers are listed in the Shenzhen bourse, according to exchange filings dated on Tuesday.
Lingshi Henmang has expanded to 4,000 stores since its inception in 2017 thanks to its proximity to residential neighbourhoods and its affordable product range.
The strategic funding is set to give a leg up to Changsha-based Lingshi Henmang, which operates in the competitive leisure food market. Around 40% of consumers have bought more snacks in 2022 compared to the pre-pandemic times, according to local market research firm Daxue Consulting, citing data from CBNData.
In November, Lingshi Henmang merged with its counterpart BA Capital-backed Super Ming. While the two snack retailers will operate independently, the merger brings together a total of 6,500 brick-and-mortar snack shops.
The merger comes four months after Lingshi Henmang was reportedly mulling an initial public offering that could raise $100 million to $200 million, Bloomberg reported, citing people familiar with the matter. The public listing could take place either in the A-share market or in Hong Kong, but deliberations are preliminary.
Lingshi Henmang counts HongShan, Gaorong Capital, and GenBridge Capital among some of its backers.