Chaayos raises $2 million from Tiger Global Management
Mumbai: Tea cafe chain Chaayos, run by Sunshine Teahouse Pvt. Ltd, has raised close to $2 million from its existing investor Tiger Global Management in an internal round of funding, said two people familiar with the development.
Chaayos was founded in November 2012 by Indian Institute of Technology (IIT)-Mumbai alumnus Nitin Saluja along with IIT-Delhi graduate Raghav Verma. The Gurgaon-headquartered start-up has set up its tea cafes in cities such as Delhi-National Capital Region (NCR), Mumbai, Chandigarh and Karnal.
“Chaayos has recently raised funds from its main investor Tiger Global. The funds were raised through a rights issue, which was closed a few weeks ago. Tiger Global invested close to $2 million in the company in the round. A few individuals also participated in the round,” said one of the two people cited above, requesting anonymity.
The funds will be used by Sunshine Teahouse for expanding the chain of tea cafes, which it runs under the Chaayos brand, he said.
“Another tea cafe chain, Chai Point, also raised some funds from its existing investors a couple of months ago and thus this fund-raise should help Chaayos keep up with the competition,” the person said.
Tiger Global declined to comment.
Saluja declined to comment on the fund-raise. “Being the leader of the chai cafe market, we have continuously improved customer experience by investing heavily in product development, technology and service. Chaayos is growing rapidly to reach the 50-cafe mark by end of this month,” said Saluja in his email response.
In the current financial year, Chaayos is well on its way to nearly tripling its revenues by growing to 70 cafes, he said.
“This growth is coming on the back of strong same store sales growth and high customer repeat, thus making us cash-positive. Tiger has been a very supportive partner on this journey because of strong fundamental growth,” Saluja added. Tiger Global first invested in Chaayos in May 2015, when it made a bet of $5 million on the tea cafe chain.
In August, online portal Entrackr.in reported that Chai Point had raised an undisclosed amount of funding from its existing investors. Chai Point, run by Mountain Trail Foods, counts Eight Roads Ventures, DSG Partners and existing partner Saama Capital, as its investors.
The Bengaluru-based tea chain is currently operating in Bengaluru, Delhi, Gurgaon, Noida, Mumbai, Pune, Hyderabad and Chennai.
Others in the sector who have raised funds include Teabox.com, an online seller of premium tea, which raised $6 million from venture capital firm JAFCO Asia and existing investor Accel Partners, along with Keystone Group Lp and Dragoneer Investment Group, Mint reported in March 2015.