Premium tea start-up Teabox raises $7 million in series B funding
Bengaluru: Teabox.com, an online seller of premium tea that counts the likes of Accel Partners and Ratan Tata among its investors, has raised $7 million in fresh, series B funding from both new and current investors, making it one of the best funded early-stage start-ups in India.
Teabox, which raised $6 million in 2015 as part of a series A round, may extend the current round to $10 million as the Siliguri- and Bengaluru-based start-up continues talks with other interested investors, according to founder and chief executive officer Kaushal Dugar.
“We are perhaps the only global tea brand to have an extremely strong digital presence that has fuelled our growth so far. And that only helps us further our growth when we go multi-channel to create a 360-degree experience for customers through offline formats. We don’t want to miss out on this huge potential and this investment is going to help us push the levers in this direction,” said Dugar.
Teabox, which currently ships tea to over 100 countries from its Siliguri warehouse, wants to use the latest funding to further expand operations, especially in areas such as cold-storage capacity, production and new-age, natural-nitrogen packaging, Dugar said in an interview on Wednesday. A fair chunk of the new funds will also be used for capital expenditure and for marketing and growth spends.
Dugar said Teabox would also look to automate packaging and other processes so that the company can increase its production by at least three to four times to meet ever-increasing demand.
Outside India, Teabox uses its website and other online partners such as Amazon to sell tea to global audiences.
So far, that strategy has worked well for the start-up, which surprisingly counts the US as its biggest market. Till about early 2015, Teabox generated roughly 95% of its overall business from international markets.
“Online and offline expansion will be a major area of focus for us. The US continues to be our biggest market, generating about 40% of our overall revenues, but we’ve also seen demand from India pick up considerably over the past year or so,” said Dugar.
Since it started in 2012, Teabox has attracted a wide assortment of investors, including the likes of Texas-based billionaire Robert M. Bass, who started out as a customer and then turned into an investor after identifying the unique potential of the early-stage venture.
“We are excited about backing the challenger in a large category with a demanding customer. We feel that Teabox’s dynamic team and its innovative supply chain of tea from plantations to cup will enable them to provide the freshest tea to consumers worldwide and redefine the category,” said Harshavardhan Bothra, principal at RB Investments.
Teabox currently ships a wide variety of premium teas from regions including Darjeeling, Assam, Nilgiris and Nepal, across the globe from its warehouse in Siliguri.
Teabox currently has a catalogue of well over 200 different tea plantations in India and Nepal. Online shoppers have the option of choosing from a variety of subscription plans to receive curated boxes of tea samples.
So far, Teabox has shipped at least 40 million cups worth of tea, Dugar said.
Teabox, however, isn’t the only tea commerce start-up that is catching the attention of investors. Earlier this week, Delhi-based Vahdam Teas also raised $1.4 million from investors such as Fireside Ventures, Mumbai Angels and the Singapore Angel Network.