Why Nayuki Put RMB 525 Million Into Lelecha

This is an English adaptation of a FoodBud historical article originally published on December 5, 2022.

On December 5, 2022, Nayuki announced a conditional agreement to acquire a 43.64% stake in Lelecha for RMB 525 million. The transaction comprised RMB 325 million for existing shares and RMB 200 million in new capital, with staged payment settlement expected between the end of 2022 and the first half of 2023.

According to Nayuki's announcement, Lelecha generated RMB 730 million in main business revenue in 2020 and RMB 870 million in 2021. Based on an investment valuation of RMB 1.2 billion, the implied valuation was not especially high.

Deal Structure

After completion, the external message was that Lelecha would continue to operate independently. Nayuki would also provide Lelecha with an RMB 80 million loan to supplement working capital.

Nayuki said the investment was intended first to generate financial returns, and second to improve the competitive environment.

Because Nayuki did not obtain control in this transaction, Lelecha would not need to be consolidated into Nayuki's financial statements. After becoming Lelecha's largest shareholder, Nayuki did not set performance-based valuation adjustment terms with the management team, and said it would support Lelecha's independent listing.

The broader operating environment was clearly difficult: Lelecha needed working capital, while Nayuki genuinely wanted to invest in the brand. The key question was whether Lelecha could achieve an independent listing within a maximum five-year window.

Note: IPO, valuation, investment, loan and forward-looking listing figures are historical, based on the December 2022 source article.