Online tea-seller Teabox raises $6 million, eyes Asian markets2 min read . Updated: 25 Mar 2015, 07:36 AM IST
Teabox is looking to expand its presence to new markets such as China, Japan and South Korea in three to six months
New Delhi: Teabox.com, an online seller of premium tea, said on Wednesday that it has raised $6 million in fresh funds led by venture capital firm JAFCO Asia and existing investor Accel Partners, along with Keystone Group Lp and Dragoneer Investment Group.
Founded in 2012 by Kaushal Dugar, the company is looking to expand its presence to new markets such as China, Japan and South Korea in three to six months. The company is also looking to set up an office and an experiential store in the US by the end of this year.
“There are 1,000-1,500 specialty retailers in the US who are already buying our tea from different channels. An experiential zone will help us cater to the businesses directly," said Dugar.
Teabox, which currently ships tea to 75 countries from its Indian warehouse, is also looking to set up a fulfilment centre in Russia to serve countries which are part of the Commonwealth of Independent States. The company gets more than 95% of its business from international markets.
“We are going to use this money to expand in newer markets, infrastructure development, talent acquisition and for marketing initiatives," said Dugar. “JAFCO has a strong presence in markets such as China, Russia and their understanding of these markets will help us expand there," he added.
Teabox currently ships a variety of premium Darjeeling, Assam, Nilgiri and Nepal teas across the globe from its warehouse in Siliguri, Darjeeling.
“It currently takes us a lot of time to ship out of India. A fulfilment centre in Russia will help us reduce the time of delivery," added Dugar.
The company will also use the money to build a cold-storage facility to store tea leaves. “Transportation and storage of tea in India is done in a very old fashioned way. The biggest enemy of tea is exposure to oxygen, which makes it lose its aroma. Hence we need cold-storage facilities to maintain high standards of tea," Dugar explained.
Teabox is not looking to break even for the next three to four years. “The investment behind infrastructure is high," Dugar added.
The company has a catalogue of more than 200 different tea plantations in India and Nepal and offers a variety of loose-leaf teas online. Customers can also choose from a variety of subscription plans to receive curated boxes of tea samples.
“Teabox’s disruptive business model is highly scalable, achieves better margins and allows complete control of the customer experience. JAFCO’s expertise across different markets will add significant value to Teabox in the coming months," said Supriya Singh, associate director of JAFCO Asia.
“I am a longtime tea drinker and first discovered Teabox as a customer. Given the superior quality of the company’s product and its innovative approach to sourcing, marketing, and distribution, we see great things ahead for Teabox," said Robert M. Bass, president of Keystone.
According to Teabox, the company has grown 10 times over the last 12 months. It does not disclose financials. Teabox has, so far, shipped 20 million cups worth of tea.