China's bubble tea explosion has minted half-a-dozen billionaires

• Bubble tea's explosion in popularity over the past few years has created immense wealth.
• There are at least six Chinese bubble tea business owners who saw their fortunes exceed $1 billion.
• A chain of bubble tea shops is set to go public in Hong Kong at a valuation of nearly $4 billion.

The explosion in popularity of bubble tea has minted at least six billionaires in China over the past few years.

Bubble tea is a sweet tea-based drink that typically comes with soft, chewy tapioca "bubbles" that sink to the bottom of and require an extra large straw to be enjoyed. The drink was invented in Taiwan in the 1980s.

Later this month, China's third largest bubble tea chain, Sichuan Baicha Baidao Industrial Co., is set to go public in its debut on the Hong Kong exchange.

The company is expected to raise more than $300 million in funds from the share sale, lending it a valuation of nearly $4 billion and making it the largest Hong Kong listing since November, according to Bloomberg.

Baicha Baidao's public debut will make its husband-and-wife founders, Wang Xiaokun and Liu Weihong, billionaires with a combined net worth of $2.7 billion based on the 73% stake they own in the company.

The public debut of Baicha Baidao is set to be followed by the IPO of two of its biggest rivals, Guming Holdings, which is the second-largest player in the Chinese bubble tea market, with 9,000 stores, and Auntea Jenny (Shanghai) Industrial Co., which is the fourth largest bubble tea retailer.

China's largest bubble tea marker, Mixue Group, is also considering an IPO. The company sports about 36,000 stores, making it almost as big as Starbucks.

Mixue was founded by billionaire tea brothers Zhang HongChao and Zhang Hongfu in 1997, with Bloomberg estimating that each brother has a net worth of $1.5 billion.

The surge in bubble tea business has particularly benefited the lower-cost tea makers, as China's economy overall has suffered in recent years and consumers have responded well to lower price points.

That pricing dynamic has put high-end bubble tea maker Nayuki Holdings in a tough spot. With 1,800 stores, Nayuki has seen its stock price fall by nearly 90% since it went public in Hong Kong three years ago due to strong competition.

The founders of Nayuki, Peng Xin and Zhao Lin, have seen their combined net worth fall from $2.2 billion in 2021 to less than $300 million today, according to Bloomberg.