Tiger Global-backed Tea cafe chain, Chaayos has raised $12 million in its Series-B funding round from SAIF Partners, Hong Kong-based Integrated Capital and Singapore based growth stage investment firm Pactolus.
The current funding comes after a long struggle by the company to raise capital. Chaayos last raised $2 million from existing investor Tiger Global Management for expanding the chain of tea cafes, which it runs under the Chaayos brand. Prior to that, Tiger Global along with Ola co-founders Bhavish Aggarwal and Ankit Bhati invested $5 million in Series A round into the company.
Founded in November 2012 by IIT alumni Nitin Saluja and Raghav Verma, Sunshine Teahouse-owned Chaayos offers more than 25 varieties of tea. It has set up over 52 tea cafes in cities such as Delhi-NCR, Mumbai, Chandigarh, and Karnal out of that 25 stores was added in just the last year. Furthermore, the company plans to scale up to 300 outlets across in top 8 cities in India over the next 5 years.
Nitin Saluja, CEO, Chaayos, told ET, “Our customer repeat rate across our stores has been 42% month on month and the only way to keep that growing is through a cluster approach within the cities we are currently present in. We will look at significantly ramping up our store count over the next year to keep up with our revenue growth which has been doubling each year for the past five years.”
The company says that the store turns profitable within three to six months of its launch, enabling better control over unit economics, even as more than 80% of its revenues come from its stores.
Chaayos claims to sell about 4-4.5 lakh cups of tea per month and sell over 2 lakh snacks (non-beverage category) in the same time frame. With the given sales number, The startup has clocked about Rs. 52 cores in the financial year 2018 and further it aims to achieve a revenue of INR 100 Crores over the next two years.
Other players in this sector include Mumbai-based Tea Trails and Bengaluru-based Chai Point, Starbucks, Café Coffee Day and Chennai-based Chai Kings who recently got 2 crores from The Chennai Angels.