Bengaluru: Mountain Trails Foods Pvt. Ltd, which owns the Chai Point chain of tea and snacks stores, is in advanced discussions to raise about $20 million in Series C funding from new investors such as private equity firm Paragon Partners and existing investors that include Saama Capital India Advisors Llp, according to two people familiar with the talks.

The latest Series C funding round comes at a time when the Bengaluru-based chain is looking to aggressively increase its footprint in top metros across India in a bid to keep competitors such as Sunshine Teahouse Pvt Ltd-run Chaayos at bay.

Chai Point’s existing investors other than Saama include DSG Consumer Partners and Fidelity International Ltd’s investment arm Eight Roads Ventures, who are also participating in this round, the people mentioned above said. New investor Paragon Partners, founded by Siddharth Parekh and Sumeet Nindrajog and which recently raised $120 million for its maiden fund, may end up leading the round, the people mentioned above said.

Chai Point founder and CEO Amuleek Singh Bijral did not respond to a request for comment.

In a December interview with Mint, Bijral said that Chai Point would look to raise at least $10 million in 2018, adding that the tea chain aimed to expand to about 500 stores over the next five years.

At the moment, Chai Point has nearly 100 outlets across Bengaluru, Mumbai, Delhi, Hyderabad and Pune, with plans to enter Chennai and other cities soon.

So far, Chai Point has raised roughly $13 million in funding, including a $10-million Series B round in 2015 led by Eight Road, DSG and Saama, which has just closed a new $100-million fund.

India is one of the world’s biggest tea markets and Chai Point plans to double down on what is estimated to be a multi-million dollar opportunity. Over the coming months, Chai Point will also face competition from the Tata Group, which has already launched its Tata Cha tea cafes and plans to aggressively ramp up.

Chai Point, which was started by Bijral in December 2010, currently targets the white-collar segment primarily through its outlets, home delivery services and recently launched vending machines, which are located inside the offices of leading corporates.

Through its vending machines, which were launched under the brand name of boxC in 2016, Chai Point competes with the likes of Coffee Day Enterprises Ltd, which runs the Cafe Coffee Day chain of coffee outlets.