BackChaayos gets $5 million from Tiger Global
This is Tiger Global's first investment in a non-technology consumer start-up in the country
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New Delhi: The consumer Internet-focused venture capital firm Tiger Global Management Llc has invested close to $5 million in Chaayos, a café that serves customized tea.
This is Tiger Global’s first investment in a non-technology consumer start-up in the country. Ola Cabs founder Bhavish Aggarwal and Ankit Bhati too invested an undisclosed amount in the company.
Kalyan Krishnamurthy, managing director of Tiger Global Management, will join Chaayos’ board.
The Gurgaon-based Chaayos will use the funds raised to expand to Mumbai and Bengaluru and open 50 more cafes in the next 18 months, according to Nitin Saluja, the co-founder and chief executive of Chaayos.
Run by Sunshine Teahouse Pvt. Ltd, Chaayos runs eight cafés in the national capital region (NCR) centred on Delhi.
It will add another 25 stores in the NCR and 25 in Bengaluru, Mumbai and Pune over the next one-and-a-half years, said Saluja.
“Chaayos aims to be India’s biggest chai (brewed tea) company. We would be present across formats and forms, to be on the consumer’s radar, every time she thinks about chai," said Raghav Verma, co-founder at Chaayos.
Mint reported in March that Chaayos was looking to raise close to $6 million as the company looks to build a pan-India presence.
Founded in November 2012 by Indian Institute of Technology (IIT) Bombay alumnus Nitin Saluja and IIT Delhi graduate Raghav Verma, Chaayos is betting that the next phase of its growth will be powered by tea delivery services and packaged tea blends that it sells through its cafés as well as on online marketplaces such as Amazon India, Snapdeal and online grocery store BigBasket.
The company, which sells 100,000 cups of tea in a month, is targeting to sell close to three million cups of tea within 18 months, with plans to open chai- on-demand stores.
The stores will act as the small delivery centres and will help the company meet larger target audience and also save real estate costs.
In April, Chaayos launched its mobile app, which allows customers to order food and tea on their phones and have them delivered at their doorstep.
Chaayos, which gets 45% of its revenue from food sold in the cafés, is already generating profits at a store-level. The company operates with gross margins as high as 65-70%. It competes with the Saama Capital-backed Chai Point.
Chai Point too is looking to triple its network of tea parlours over the next two years across Pune, Mumbai, Hyderabad and the NCR. It runs 70 tea outlets in Bengaluru.
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