MUMBAI: In what is reflective of growing interest in the freshlybrewed tea cafe segment in India, tea cafe chain Chaayos has raised Rs 81 crore (about $12 million) from marquee venture capital firm SAIF Partners, Hong Kong-based Integrated Capital and Singapore-based growthstage investment firm Pactolus.
The Series-B investment comes almost one year after the firm raised $2 million from existing investor Tiger Global Management. Chaayos has over 52 stores across Delhi-NCR, Chandigarh and Mumbai, having added 25 stores just in the last one year.
A large part of the capital raised will be used to further deepen its offline presence in the geographies it is currently present in as the company charts a concentrated approach to keep its customer cohorts intact. “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,” CEO Nitin Saluja told ET. “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.”
For Chaayos, each store turns profitable within 3-6 months of its launch, enabling better control over unit economics, Saluja said. With over 80% of the firm’s revenues coming from its stores, an extensive offline presence will help the company chip away at the dominance of coffee chains such as Café Coffee Day and Starbucks across the country.
The chain, which competes with Saama Capital and DSG Consumer Partners-backed Chai Point and Mumbai-based Tea Trails, ended FY18 with revenues of about Rs 52 crores
he FY18 financials are unaudited and may see a minor change when the firm files the audited results.
Chaayos is betting big on its offline expansion to meet its goal of doubling revenues month on month and expects the move to aid its aim of clocking revenues of Rs 100 crore over the next 2 years. Chaayos has seen its same store sales growth rise by 30%, selling about 4-4.5 lakh cups of tea per month with its snacks (non-beverage) category selling another 2 lakh units each month.
In a bid to enable consistency across the cafes, Chaayos uses machines called Chai Monks with minimal human intervention using fresh ingredients to offer custom made, freshly brewed tea for customers across all stores.
The new Delhi based cafe chain had earlier this year, roped in former Jubilant Foodworks CEO Ajay Kaul as its Chief Advisor with an aim to scale up to 300 outlets across top 8 cities in India over the next 5 years
The development was first reported by ET RISE