36Kr Exclusive | UMe Tea Completes $10 Million Series A Funding, Chinese Engineers Open Milk Tea Shops in North America

36Kr has learned that North American tea beverage brand "UMe Tea" recently completed a $10 million Series A financing round. Led by US-based fund Conductive Ventures, iFly.vc and EGP (Mingyu Ventures) participated as follow-on investors. The funds from this round will be mainly used for team improvement and increasing the number of stores in the Bay Area.

"UMe Tea" (hereinafter referred to as "UMe Tea") is a company that 36Kr has been continuously following. It was founded in California, the United States in 2019. The founder, Li Jiachun, was a Chinese engineer in Silicon Valley before starting the business. UMe Tea starts from the taste preferences of local American consumers and integrates the advantages of Chinese new tea beverage brands in terms of concept, culture, and operating mechanisms. It has developed into a new tea beverage brand with a strong local American feel. Its main product categories include milk cap tea, fruit tea, baked desserts, snacks, etc., with approximately 30 SKUs.

Some products of UMe Tea

In June 2023, 36Kr reported that UMe Tea completed a seed round financing of millions of dollars invested by iFly.vc. Two years later, the number of its stores has increased from 9 to 27, and it plans to open 33 stores by the end of 2025. Except for 3 franchised stores as pilots, the rest are all directly-operated stores.

In addition, UMe Tea's supply chain has become more mature and centralized than before. According to Li Jiachun, UMe Tea has established a long-term cooperation with a major US food service supply chain company, which provides services such as raw material procurement, warehousing, and transportation.

When talking about the changes in the US tea beverage market today, an unavoidable topic is that Chinese new tea beverage brands are competing to expand into North America - HEYTEA, MoLiNaiBai, CHAGEE, Ningji, Shanghai Aunty, NAIXUE's TEA, and ChaPanda have all entered the market. Among them, HEYTEA has more than 30 stores in the United States. As the Chinese market and the Southeast Asian market become saturated, the relatively milder competition environment and strong consumer purchasing power in North America mean opportunities. The market generally believes that the "boom of opening stores in North America" by Chinese tea beverage brands has just begun.

Facing the "fierce" wave of domestic brands expanding overseas, the UMe Tea team initially felt a sense of tension. "There are HEYTEA stores next to some of our stores, and we have also witnessed some mom-and-pop stores closing down quickly under the impact."

The "native" localization gene made the team quickly realize that UMe Tea has a different market and customer base from Chinese brands, and the overlap is not obvious. It is reported that among UMe Tea's customers, the proportion of non-Asian people is significantly higher, about 60%. Even among Asian customers, they are mainly from India, Vietnam, and South Korea, and Chinese customers do not dominate.

In terms of performance, since the beginning of this year, UMe Tea's single-store performance has increased by about 30% compared with the same period last year, without being affected by the changes in the competitive environment. "For us, perhaps the arrival of domestic brands has also made the local market hotter overall." Li Jiachun said.

What is the "localization gene"? UMe Tea has answered this question in terms of product and brand building.

At the product level, Chinese consumers prefer a "back-to-basics" taste. In contrast, American consumers still prefer a "stronger" taste. Li Jiachun gave an example: "For example, there are many Mexicans in the Bay Area, so spicy mango smoothies made with Mexican hot sauce are very popular."

In addition, local consumers usually hope for a more diverse menu. "Some people are lactose intolerant, and some people don't drink caffeine, etc." UMe Tea's menu also has clear classifications to give customers enough options.

Since the beginning of this year, classic bubble tea, as well as mango and matcha products, have been UMe Tea's best-selling products. The salted crispy chicken, which has been on sale since the opening of the first store, has always played the role of a "tea companion". Currently, its sales account for 30% of UMe Tea's total sales. "Basically, everyone who enters the store buys a drink and an order of salted crispy chicken."

Currently, Ume Tea launches new products about twice a month, and new product development is carried out around three main ideas - First, for basic products, continuously make minor upgrades according to the optimization status of the supply chain capabilities; second, follow the latest trends. For example, matcha and Dubai chocolate elements are very popular this year, so UMe Tea has also launched products such as "pistachio Dubai chocolate milkshake"; third, launch new products according to seasonal fruits and special festivals.

Customers buying bubble tea at UMe Tea

In terms of marketing, UMe Tea starts from the emotional value of young people, and many of its activities have generated a lot of organic spread. Recently, its rabbit blind box and card collection activities have gained popularity on social media. "Buying a cup of milk tea allows you to collect a brand IP card. Some people buy 20 cups of milk tea and treat everyone in the store just to draw and collect cards. They have a great time, and people even buy cards from each other on Instagram." Li Jiachun gave an example. The card collection activity has tripled the store's performance.

UMe Tea brand merchandise

According to data from international consulting firm IBIS, there were only 6,635 milk tea shops in the United States in 2023, and this number increased to about 8,000 in 2025, but no single brand has a market share of more than 5%. In this fragmented market, UMe Tea's current strategy is to select a main market, continuously increase the number of stores, and build brand awareness.

Currently, UMe Tea is gradually taking back several stores outside California, and all newly opened and newly signed stores are also located in the San Francisco Bay Area of California, with an average distance of about 3 miles between stores. Li Jiachun said that in the next period, the focus of store expansion will still be in the Bay Area. "In fact, just the California market can support us to open two or three hundred stores."

When talking about the next business focus, she mentioned three points: first, improving the team structure; second, continuing to enhance digitalization and the supply chain; third, continuing to increase the number of stores in the Bay Area. Li Jiachun believes that since commercial real estate developers usually control the proportion of a single business format in a region, the number of available locations is limited, and the regulations on employment are also very strict. The pace of the US market is difficult to be as "fast" as that in China.

"We want to build a local brand in California. First, we need to do a good job in the regional market and strengthen our supply chain capabilities before considering other things." - In terms of development path, UMe Tea hopes to learn from Guming, respect the market rhythm, focus on in-depth development first, and then expand outward.