Multi-city beverage franchise Chaayos raised series B funding with an amount of $21.5 million. The funding is a mix of equity and debt brought in by parent company Sunshine Teahouse which raised $18.5 million in equity from Think Investments, a Silicon Valley-based company, and a few other investors. Venture debt of $3 million was received from InnoVen Capital.
The tea cafe chain has existing funding from investors such as Tiger Global Management, SAIF Partners, Integrated Capital, and also from Neeraj Arora, who was earlier the business head for WhatsApp.
The founder of Chaayos, Nitin Saluja, said that this capital will be used for 3 things- opening new stores, building technology and hiring more staff. He also added that the company makes a profit in stores, so picking up debt makes sense.
Tea happens to be a very important beverage for the Indian market which proved beneficial for the tea cafe to have stores in the capital Delhi, Mumbai and Bengaluru. They are planning to grow further into their current market instead of testing new market waters.
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They have an 80 store strong presence at the moment with 72 stores in Delhi and Mumbai and 8 stores in Bengaluru. A plan of scaling to 300 stores in the next 3 years is one of Chaayos’ targets. By the end of 2020, the company plans to have 100 stores set up.
The founder has said that the use of technology has boosted the bottom line by 5% as they were able to work efficiently with low wastage and better stock keeping. He also mentioned that they have managed profits in every store after 3-5 months which is powering their move to set up 300 stores now.
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