MUMBAI: Third Wave Coffee, a Bengaluru-based café chain, is close to raising $80-100 million in a funding round led by existing backers WestBridge Capital and Creaegis, three people familiar with the matter said.
The round is undergoing documentation and is expected to close in the next couple of weeks, one of the people cited above said.
“It will be a mix of primary and secondary share sale. Existing backers will double down on their investment with Westbridge putting in the larger cheque size,” a second person said.
While the transaction is largely an internal round, it is likely to take place at a higher valuation of $400-500 million, driven by improved operating performance over the last two years and a narrowing of losses, a third person said. The primary capital will be used to fund expansion plans. The company was valued at around $155 million as of late 2023, according to Tracxn data.
All the people spoke on the condition of anonymity as the discussions are still private. Third Wave and Creaegis did not respond till the time of publishing. Westbridge declined to comment.
The development comes nearly three years after the company raised $35 million in its Series C round led by Creaegis, alongside participation from other existing and angel investors. At the time, the company had outlined plans to use the capital for pan-India expansion, strengthening its supply chain, enhancing technological capabilities and strategic investments in technology.
Founded in 2017 by Sushant Goel, Ayush Bathwal and Anirudh Sharma, Third Wave Coffee operates a chain of cafés and also sells products including coffee beans, cold brew bags and merchandise. It has expanded across Bengaluru, Delhi, Pune, Mumbai and Hyderabad, among others, according to its website.
The latest fundraise comes amid increasing investor interest in India’s organized café and quick-service beverage market. Earlier this month, Blue Tokai Coffee raised ₹175 crore in a round led by Anicut Capital, with participation from A91 Emerging Fund, Verlinvest and others. Chaayos was planning to raise a $50–70 million round in April, Mint reported.
Third Wave Coffee competes with domestic and international players including Blue Tokai, Subko and Starbucks, in a segment that has become more crowded with the entry of global chains such as Tim Hortons and Pret A Manger over the past few years.
Heisetasse Beverages Pvt. Ltd, which operates Third Wave Coffee, reported revenue from operations of ₹268.6 crore in FY25, compared with ₹241.3 crore a year earlier. Its losses narrowed to ₹94.4 crore from ₹152.4 crore in FY24, according to filings sourced by Tofler from the Ministry of Corporate Affairs.
India’s food services market, valued at $80 billion in 2024, is expected to grow at a compounded annual growth rate (CAGR) of 10-11% through 2030, driven by the organized sector, according to a report by Redseer.
The consultancy firm noted that the Indian coffee market, valued at about $1.2 billion in 2023, is projected to expand at a CAGR of 15-20% to $2.6-3.2 billion over the next two years, reflecting changing consumer preferences and growth in organized dining and delivery-led consumption.