Singaporean sovereign wealth fund GIC is buying a 30% stake in Starbucks Korea for KRW800 billion (US$713 million) from Starbucks Corp, reports EconoTimes.

Shinsegae subsidiary E-Mart currently has a 50% stake in Starbucks Korea and is set to take Starbucks’ remaining 20%.

GIC had previously been burnt by its foray into the coffee shop business. It was a backer of Luckin Coffee, a startup that sought to displace Starbucks in China. It invested in a private funding round before the chain’s IPO in 2019. However, shares in Luckin crashed more than 70% after it disclosed that an internal investigation had uncovered CNY2.2 billion (US$310 million) of fraudulent transactions.

South Korea is a growing coffee import destination with EconoTimes reporting that imports grew 28% to 176,648 tonnes in 2020. It added that Starbucks Korea’s revenue is now more than 10% of Starbucks’ global revenue and posted revenue of KRW1.93 trillion with an operating profit of KRW164.4 billion.

Retail sales in South Korea have bounced back from the pandemic and consumer confidence in on an upward trend, thanks to stimulus measures including wage subsidies and cash payments to households suffering from falling income due to Covid-19.

Related funds GIC