Bengaluru-based café chain Third Wave Coffee has raised ₹408 crore in a round led by existing investor Westbridge Capital, largely through a primary issuance, as it looks to expand its operations, top executives said.
The transaction, which also witnessed participation from Creaegis and other angel investors, includes a small secondary component through which a few early investors have exited some of their stake. On 26 May, Mint first reported on Third Wave’s plans to raise a funding round led by the existing investors.
"Most of the capital has been primary. The secondary component involved a small percentage of share purchase from earlier founders who are not actively involved in the business or a part of the management anymore alongside a few smaller shareholders,” Sandeep Singhal, co-founder & managing partner at Westbridge Capital, told Mint in an interview.
The new funding will fuel Third Wave Coffee’s next phase of expansion, with capital directed towards geographic growth in existing markets, building greater density in high-potential cities and strengthening the brand’s ability to serve a wider range of consumer occasions.
The latest funding values the company at about ₹2,000 crore and will take Westbridge’s shareholding to about 47%, while Creaegis will own close to 15% in the company, according to Singhal. The remaining stake is held by the founders and other angel investors.
The company last raised about $35 million in a round led by Creaegis, along with participation from existing investor Westbridge, in 2023 at a valuation of ₹1,300 crore, according to market intelligence provider Tracxn.
Bigger footprint
“The idea is to keep building and scale to about 400-500 stores over the next few years,” Singhal said. This is a “great category” as coffee, often seen as a habit-forming activity, is consumed by several Indian households, with Third Wave already having become a leader in the market, he said, explaining the rationale behind doubling down on the company.
The latest investment builds on WestBridge Capital’s longstanding partnership with Third Wave Coffee. WestBridge also led the company’s $21 million Series B round in 2022, following its $6 million Series A in 2021.
Founded in 2017 by Sushant Goel, Ayush Bathwal and Anirudh Sharma, Third Wave Coffee operates a chain of cafes and 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.
In the next few months, the company will focus on growing its retail channels by foraying into nine new cities, including Ludhiana, Jalandhar, Amritsar and Lucknow, Third Wave’s chief executive officer Rajat Luthra and founder Sharma told Mint.
Over the past year, Third Wave has also opened stores in Ahmedabad and Kolkata, with plans to deepen its presence in tier-II and tier-III cities.
“We have several stores that are under construction. This is the result of the time we spent on supply chain and building an understanding of the different markets and how to cater better to those regions over the last year. While our menu will largely be the same, we consider certain regional nuances for that particular demographic,” according to Luthra.
Third Wave, which currently operates about 240 outlets, is also evaluating opportunities in other eastern markets, including Guwahati, Ranchi, Patna and Bhubaneswar.
Beyond coffee
About three months ago, the company also forayed into the dessert category under the name ‘Third Rush’, a move it expects to play a larger role in the overall business.
Third Wave has introduced the category selectively and plans to take it to 50 stores by the end of this year.
Every year, the company has been adding roughly 80-100 stores and plans to continue this trajectory, closing FY27 with about 320 outlets.
Its revenues have grown by 30% to about ₹337 crore in FY26, although the company is yet to file its audited results.
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.
The company will also continue its focus on F&B innovation, expanding beyond its core coffee proposition through desserts, signature brews beyond coffee, all-day menus, seasonal and festive limited-time offerings, breakfast and savoury formats, and other new occasion-led consumption propositions.
Market brewing
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 organised 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 organised dining and delivery-led consumption.
Mint has previously reported on other peers such as Blue Tokai Coffee Roasters and Chaayos, which are in the process of raising capital.
The segment has become more crowded with the entry of other domestic and international players over the last few years. Third Wave competes with players such as Subko, Starbucks, Tim Hortons and Pret A Manger.