"Saturnbird" Closes Tens of Millions of RMB in Series A and A+ Rounds, FreeS Fund Continues to Follow On | FreeS Fund News

" From the Investor

Huang Hai, Executive Director, FreeS Fund

Email: hai@freesvc.com

Over the past several years, China's coffee market has maintained an annual growth rate of roughly 20% on top of a market size exceeding 100 billion RMB, yet per capita coffee consumption remains low at just 6–7 cups per year. Coffee is fundamentally an agricultural product, leaning toward a standardized commodity. In China's coffee market, every company must find its own unique point of innovation on top of homogenized raw materials.

Saturnbird is one of the few standout cases of product innovation. The freeze-drying process behind Saturnbird's cold-water soluble powder, combined with its distinctive, highly recognizable packaging (Lego-like mini coffee cups), sets it apart in the market.

Instant coffee's traditional consumption scenario skewed offline, with limited internet DNA. Saturnbird chose to enter e-commerce through planned consumption scenarios — consumers buy combo packs of 24 or even 36 cups online at once, satisfying their monthly coffee needs. Saturnbird's innovations in product, packaging, and sales format align with the trend of coffee shifting from novelty/status consumption to everyday consumption. Looking ahead, we hope Saturnbird can continue to leverage its strengths and consolidate its brand momentum.

For more analysis on the coffee industry, see The Category Logic Behind the Buzz: A Coffee Industry Investment Case Study.

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Saturnbird Closes Tens of Millions of RMB in Series A Funding, Becoming First Domestic Brand to Top Tmall Double 11 Coffee Rankings | 36Kr Exclusive

Source: 36Kr Pro

Author: Xu Zi

36Kr has learned exclusively that specialty coffee brand Saturnbird has completed two consecutive funding rounds — Series A and A+ — totaling tens of millions of RMB, with both rounds led by Tiantu Capital and followed by existing shareholder FreeS Fund. In November of last year, Saturnbird had raised a Pre-A round of over 10 million RMB led by FreeS Fund. Following this new funding, the company will further expand its product portfolio around different scenario-based needs, building out a coffee consumption lifestyle.

Founded in 2015, the company's products include instant specialty coffee, drip bag coffee, and coffee accessories (brewing equipment, cups). After launching its instant specialty coffee, the product quickly became a hit thanks to its innovative packaging (small cup-shaped jars), well-preserved flavor and aroma, and excellent solubility (easily dissolving in cold or hot water or milk).

During last year's Double 11, Saturnbird ranked first among domestic coffee brands. On Double 12, it placed second across all coffee categories (first place went to Nestlé). And during the just-concluded 2019 Double 11, Saturnbird's transaction volume was ten times that of the previous year's Double 11, with single-day sales exceeding its entire previous year's revenue. It surpassed Nestlé to become the #1 brand in the coffee category — and the first domestic brand ever to top the coffee rankings. According to company data, monthly sales have exceeded 10 million RMB continuously since June this year.

In just over a year, Saturnbird carved out a "specialty instant" niche and quickly established a differentiated brand image. On pricing, Saturnbird's individual products are positioned around 8 RMB, far below chains like Starbucks. This year, Saturnbird also introduced a smaller cup size (2g capacity) at 4–5 RMB per cup, hoping to satisfy users' more routine, high-frequency consumption needs.

On the product front, building on its original No. 1–6 flavor range, Saturnbird launched No. 0 (master collaboration edition). The brand has also recently introduced tea lattes, using an espresso machine to extract Tea Espresso, then adding milk to make tea lattes or tea cappuccinos — a drink many specialty cafés already offer, often described as the tea closest to coffee.

Regarding product R&D, founder Wu Jun said Saturnbird's product philosophy isn't to "instantize everything," but to stay within the coffee category and develop around different needs and scenarios. The tea latte targets people who want coffee but worry about caffeine intake affecting their sleep, or those sensitive to caffeine — developed specifically for this audience.

Good products build brand connection; only strong brands can capture user mindshare. On branding, founder Wu Jun believes it comes down to two dimensions: texture + trust. Texture means the product delivers excellence across the entire experience — from usage, visuals, delivery, to the actual consumption. Trust means building a relationship of trust and mutual growth with users, encompassing product service, recommendations, and user feedback and suggestions for the product and company. The key to building both lies in content.

Based on this, Saturnbird's marketing and promotion strategy isn't about "manufacturing demand" but "amplifying word of mouth." Specifically, rather than choosing top-tier KOLs or mass-scale campaigns, the team identifies KOCs (key opinion consumers) from existing users who are already willing to share and spread the word on social platforms, then collaborates with them to co-create content.

This approach is clever: if someone is already a brand user, they've necessarily tried and liked the product, so their content and expression will be genuinely authentic. Additionally, similar users' social networks are more likely to become new customers for the brand, likely yielding more efficient conversion rates.

According to Wu Jun, marketing spend as a percentage of revenue is currently far below industry average, and the user base is trending younger — over 70% of Saturnbird users are post-90s.

When it comes to coffee consumption, one can't avoid the "three waves of coffee." Compared to developed Western countries, China's coffee market sees all three consumption patterns coexisting: instant coffee still commands over 70% market share, while commercial chain coffee (Starbucks, Costa, etc.) and specialty coffee are rising rapidly at the same time. As domestic coffee brands emerge, international giants and traditional food & beverage companies are also actively expanding into coffee, and new tea drink brands are launching coffee beverages one after another.

In a market this large (100-billion-RMB scale), fast-growing (compound annual growth rate exceeding 23% over the past five years), and multi-faceted in demand, Saturnbird's positioning is to fill the full spectrum of out-of-café scenarios with convenient products closer to freshly ground coffee, and in the long run, to manage users' coffee consumption behavior.

In March this year, Saturnbird opened its first offline space in Changsha — the "Coffee Lab" — with the purpose not being sales but user engagement and product testing. Going forward, the company will gradually integrate its membership system and conduct comprehensive online-offline user operations through channels like mini-programs, shaping the brand's presence in "new coffee lifestyle."

This year, Saturnbird established an office in Shanghai (headquarters remain in Changsha) and is recruiting more outstanding talent. Next year, the brand will open a flagship store in Shanghai.

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