Bengaluru: Mountain Trails Foods Pvt. Ltd, which owns the Chai Point chain of tea and snacks stores, has raised $20 million in a Series C funding round led by new investor and private equity firm Paragon Partners.
All of Chai Point’s existing investors—Saama Capital India Advisors LLP, DSG Consumer Partners and Fidelity International Ltd’s investment arm Eight Roads Ventures—also participated in the funding round.
“This funding round is primarily aimed at further strengthening the brand’s multi-channel go-to-market. A substantial portion of our investment proceeds will go towards deepening our sales, marketing, and service operations for our automated hot beverage dispending business—boxC.in—which is the next growth driver for the business," said Amuleek Singh Bijral, founder and chief executive of Chai Point.
“High quality tea and coffee is fundamental to our growth and we are going to expand and refine our underlying sourcing program—‘Garden to Glass’. Also, we look forward to delighting our customers with an especially enhanced food menu," Bijral added.
Mint had on 8 April 8 reported that Chai Point was in advanced discussions to raise $20 million from Paragon Partners and all its existing investors.
Paragon Partners was founded by Siddharth Parekh and Sumeet Nindrajog and recently raised $120 million for its maiden fund. Parekh will join the Chai Point board after this funding.
“We look forward to working with the Chai Point team and helping them scale up their operations. We are bullish on the consumption story in India and are excited to partner with the Company. This investment is in line with our overarching investment theme of partnering high-calibre entrepreneurs with compelling business models," said Parekh of Paragon Partners.
DCS Advisory India, which was earlier known as Signal Hill Capital, was adviser to Chai Point for this funding, which will fuel the start-up’s next phase of expansion.
In a December interview with Mint, Bijral said 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.
Chai Point, at present, has nearly 100 outlets across Bengaluru, Mumbai, Delhi, Hyderabad and Pune, and plans to enter Chennai and other cities soon.
So far, Chai Point has raised roughly $34 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.
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 for offices of leading corporate firms.