5Y News | Premium Chocolate Brand "Daily Dark Chocolate" Secures Two Consecutive Funding Rounds Exceeding 100 Million Yuan Each

五源资本·March 25, 2021

Shift consumers' traditional perception of chocolate.

Emerging consumer brand Daily Dark Chocolate recently closed two consecutive funding rounds — a Series A+ and a Series B — each exceeding RMB 100 million. The Series A+ was led by Source Code Capital, with existing shareholder Greenwoods Capital following on and iQIYI also participating. The Series B was led by 5Y Capital, with existing shareholders Source Code Capital and Yuanxing Capital following on. According to the company, the new capital will primarily go toward team building, product R&D, and brand investment. In early 2020, Daily Dark Chocolate had just completed a $4.5 million Series A round.

Yuan Ye, Partner at 5Y Capital, said: "We first noticed Daily Dark Chocolate when many friends around us mentioned it was the best chocolate they'd ever had. We believe consumer word-of-mouth is the solid foundation for any consumer brand's growth. Our later conversations with Ethan and Lincy's team only strengthened our conviction that this is a product-driven consumer brand company. We align with the company's vision and made our investment decision upon our first meeting. We're honored the team trusted and chose us. We believe Daily Dark Chocolate will continue bringing consumers more innovative, delicious products and grow into a defining brand for a generation's lifestyle."

Ethan

Founder, Daily Dark Chocolate

Why did you start Daily Dark Chocolate?

Ethan: I'm a chocolate enthusiast, so I've always paid close attention to this category. China's chocolate market has long been dominated by foreign players, with no real brand truly built from local consumer needs. Right now, both the market environment and the maturation of global information and logistics infrastructure present a great opportunity — we can leverage global industrial advantages to create a chocolate brand with world-leading product quality that also delivers more value to local consumers.

Since starting the company, what principles or common sense have become increasingly important to you?

Ethan: "Focus, and become the category leader." Doing subtraction becomes more and more important, but it's also counter to human nature, so it's very difficult. For a startup, the most precious resources are time and energy. Only when a company has a long-term mission, embraces the future, and has sufficient conviction will it avoid getting lost in short-term opportunities and temptations that scatter resources and energy. Only through focus, continuously deepening your differentiation, can you secure your position and maintain your lead. Only by becoming the absolute category leader can you gain greater momentum.

Why did you choose 5Y Capital's investment?

Ethan: Choosing investors is actually a choice of values, not just money. The brand journey is long and requires sufficient conviction and patience to weather cycles. From our very first meeting with 5Y, I felt their deep, fundamental thinking about the essence of our industry — it was an exchange that truly inspired me and felt like meeting a kindred spirit too late. So we made our decision quickly after that first meeting.

Tong Ji

Senior Investment Manager, 5Y Capital

Why did you choose to invest in the chocolate segment? And why Daily Dark Chocolate specifically?

Tong Ji: Honestly, we didn't "choose the chocolate market" from the top down — we decided to invest after meeting with Ethan and Lincy's team.

Beyond the excellent team and product, I see two layers of investment logic. First, we believe China's chocolate market remains underexplored. Per capita chocolate consumption in China is dozens of times lower than in Europe and America, but from what we've observed, Chinese consumers don't actually dislike chocolate. If there were products and marketing approaches better suited to Chinese consumers, the market could grow several times over — this isn't just a battle for existing share. The second layer is more abstract: we don't view Daily Dark Chocolate purely as a "chocolate retail company." There are greater opportunities here that we look forward to Ethan and Lincy's team realizing.

When did you first encounter Daily Dark Chocolate? What impressed you most about the team and founders?

Tong Ji: I bought Daily Dark Chocolate products quite early on. I remember the first time I messaged Lincy on WeChat, I sent photos of several boxes of dark chocolate I'd purchased — my identity wasn't just as an investor, but also as a consumer.

Later, after Double Eleven, Elwin (Yuan Ye) and I visited Daily Dark Chocolate's office. Ethan and Lincy walked us through their products and entrepreneurial journey. That earnest dedication to product and brand made us decide to invest immediately. We're honored the team also chose us quickly — it was a very pleasant and firm mutual selection process.

When evaluating emerging consumer brands, beyond the team itself, what other factors do you prioritize?

Tong Ji: I have one very simple, straightforward criterion: would I personally use this consumer brand's products? And if I'm not the target user, would I proudly recommend it to the target audience?

This question gets at the heart of the company's value creation — whether it's product, value-for-money, or brand spirit, there must be something that moves consumers. Traffic fades, but the trust and goodwill a brand builds in consumers' hearts lasts.

Daily Dark Chocolate is an emerging chocolate brand under parent company LANDBASE. Its products emphasize sustainability, Swiss origin, low sugar, zero additives, and health. Its first product, the Small Square Box dark chocolate, launched in July 2019. In August 2020, the brand entered the more mass-market milk chocolate category with its second flagship product — "DARK MILK" black milk chocolate.

Daily Dark Chocolate established an omnichannel positioning from its founding. Shelf space is the "must-win battleground" for fast-moving consumer goods and also the "advertising real estate" for building brand recognition. As a snack, chocolate brands need to get their products into channels closest to consumers. Therefore, Daily Dark Chocolate's channel strategy this year has been "convenience store-centric." Within just one year of launch, the brand has entered approximately 100,000 offline retail terminals, covering FamilyMart, Lawson, 7-Eleven, Bianlifeng, and other chains.

This offline channel capability also attracted online platforms like iQIYI. Daily Dark Chocolate is iQIYI's first-ever consumer brand investment; the two parties had previously collaborated on various brand initiatives. Daily Dark Chocolate sponsored iQIYI hit variety shows including The Rap of China 2020, Fashion Partners 2, and Party of Non-Daily. Its first brand spokesperson was Liu Yuxin, champion of iQIYI's talent show Youth With You 2 — Weibo topics related to Liu Yuxin's endorsement of Daily Dark Chocolate exceeded 600 million views. In 2021, Daily Dark Chocolate also sponsored Youth With You 3, currently airing.

Daily Dark Chocolate co-founder Lincy noted that compared to online-only brands selling through e-commerce, offline channel advantages help Daily Dark Chocolate better convert traffic from major platforms. Additionally, when naming the brand, the team directly tied the brand name to the "dark chocolate" category, and reinforced the prominence of "Daily Dark Chocolate" on packaging and offline materials — using limited shelf space to maximum effect in transmitting the brand label to consumers.

In China's chocolate FMCG sector, international giants like Mars, Mondelēz, Ferrero, and Nestlé dominate most market share, with few domestically recognized Chinese chocolate brands. Yet in recent years, amid the trend toward healthier eating, the chocolate and confectionery market's product structure — much like the beverage market — is undergoing massive transformation. Daily Dark Chocolate seized this category opportunity to carve out a place in the competitive market.

Cocoa itself is a healthy ingredient with antioxidant properties, cardiovascular benefits, and energy-boosting qualities. "Health" became the core of Daily Dark Chocolate's product strategy. Avoiding the most concentrated milk chocolate segment, Daily Dark Chocolate initially targeted the fast-growing dark chocolate category with its Small Square Box product, priced at RMB 19.8 per box (7 pieces).

After establishing consumer mindshare in this niche category, Daily Dark Chocolate moved into the more mass-market milk chocolate segment with its "DARK MILK" product, extending its "health-focused" selling point.

According to Daily Dark Chocolate co-founder Ethan, this product has higher cocoa content than comparable products in the same channel type, yet its sweetness is only 60-70% of comparable milk chocolates, with unit price kept under RMB 10. Daily Dark Chocolate is currently the only chocolate brand on convenience store shelves prominently featuring health concepts like high dietary fiber.

In Ethan's view, the ceiling for chocolate products isn't the category itself, but the consumer needs behind the category. Next, Daily Dark Chocolate plans to explore incremental markets based on different life scenarios, strengthening chocolate's functionality beyond its snack attributes. The team will conduct consumer education around cardiovascular health, energy supplementation for study and work scenarios, and develop vertical channels. It has also assembled a 10-person R&D team at its Swiss factory to strengthen functional product development and shift consumers' traditional perceptions of chocolate.

Last April, Daily Dark Chocolate appeared in Lao Luo's (Luo Yonghao) livestream debut, becoming the youngest brand featured in that broadcast. On the brand marketing front, the company has pursued various co-branding partnerships, such as a cocoa powder plant milk series with Yili Group's Zhixuan line.

In 2020, Daily Dark Chocolate also became the designated gift bag brand for fashion galas including ELLE, Esquire, Marie Claire, the China Film Festival, and Fashion Week. This year, Daily Dark Chocolate launched co-branded products with Lane Crawford's three locations and became the designated chocolate brand for Harrods The Residence Shanghai, the London luxury department store's Shanghai outpost.

5Y Capital (formerly Morningside Venture Capital) currently manages approximately $3 billion across USD and RMB dual-currency funds. We believe that if the you whom others see as crazy starts to be believed in, the world becomes a better place.

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