MoMo Bakery was valued at ¥1B, then retreated to its hometown

墨茉点心局 launched in 2020 in Changsha, Hunan, riding the wave of 'new Chinese pastry' (新中式烘焙) that swept China's snack market. The brand reimagined traditional Chinese pastries — wife cakes, mochi, egg tarts — in modern, Instagrammable packaging. Venture capital poured in: the chain raised hundreds of millions of yuan from top firms including 今日资本, reaching a valuation of over ¥1 billion at its peak.

By 2025, the new-Chinese-pastry bubble had burst. 墨茉点心局 closed nearly all stores outside its home base of Changsha, retreating entirely to Hunan province. The brand joined虎头局 and other bakery chains in a sector-wide collapse as investors realised that fashionable packaging and a nostalgic concept could not sustain the economics of dozens of stores in expensive mall locations.

The retreat reflected a pattern across China's VC-backed food startups: brands that grew on hype and cheap capital were forced to shrink or die when funding dried up. 墨茉点心局's billion-yuan valuation became a cautionary tale of how quickly a food fad can go from investor darling to cautionary footnote.