Kolkata: Chai Break, a Kolkata-based restaurant chain that serves hookah and snacks, has been valued at Rs50 crore in the first round of an external funding.
ALP Retail Pvt. Ltd, which runs the chain, on Monday said it sold a 10% stake to Venture Catalysts, a fund that invests in early-stage start-ups, for Rs5 crore.
Conceived in 2010, the first outlet of Chai Break was launched in November 2011. ALP Retail currently has 11 outlets, of which eight are in Kolkata, two in Bhubaneswar and one in Durgapur. The company also provides outdoor catering services.
ALP Retail was founded with a seed capital of only Rs50,000, said Aditya Ladsaria, one of the two co-founders. The firm now has an equity base (paid-up capital) of Rs1 crore, he added.
His business partner Anirudh Poddar, who holds an equal stake, said the company has been profitable from the beginning.
It clocked Rs13.4 crore in revenue for fiscal year 2017; in the current fiscal, the revenue is expected to be Rs18 crore, Poddar added.
The investor, Venture Catalysts, was impressed with the wide range of snacks and beverages served at Chai Break outlets, Poddar claimed.
Ladsaria and Poddar are now looking to expand Chai Break in at least 10 more cities, with 15-20 new outlets.
So far, the chain has expanded on its own strength, but is now willing to take in partners and expand under franchise arrangements, the two co-founders said, adding that they have set a target of scaling up revenue to at least Rs50 crore by 2020.
Ladsaria and Poddar are eyeing smaller towns in the east such as Siliguri, Ranchi, Patna, Guwahati and Imphal as potential markets for expansion. Setting up a new outlet typically costs Rs40-70 lakh depending on size, they said.
Alongside, the company is looking to set up a central kitchen in Kolkata to maintain consistency at all its outlets in the city. An investment of Rs80 lakh has been budgeted for this.