Tiger Global-backed beverage chain Chaayos has reported a widening loss of Rs 71 crore for FY22 against Rs 52 crore in FY21, owing to multiple factors such as rise in hiring, employee benefits and higher marketing expenses.
The company, however, has reported a 1.5x growth in its revenue for the period under review, to Rs 135 crore versus Rs 54.9 crore in FY21, according to filings with the Ministry of Corporate Affairs. This can be mainly attributed to the company's performance in its packaged product business.
To capitalize on the work from home (WFH) and immunity boosting trend, Chaayos, in 2020, launched a series of instant & herbal chai products. It was also planning to launch 20 more products fundamentally around the vision `Meri Wali Chai’ under the packaged product portfolio.
The cost of materials, however, accounted for the bulk of the expenses for Chaayos at Rs 53 crore in FY22, a 38% increase from the previous fiscal year.
Chaayos has also increased its hiring as a consequence of which the cost centre saw a sharp rise. The employee benefit cost rose to Rs 51 crore in the current fiscal year as against Rs 31 crore in FY21, a 64% increase. The employee benefit costs also included Esop (Employee Stock Option Plan) which amounted to Rs 6.2 crore.
The rent for its outlets across Delhi-NCR, Mumbai and Bengaluru (during FY22) also increased to Rs 28 crore in FY22 as compared to Rs 20 crore in FY21.
Lastly, advertising costs and commissions paid to selling agents grew to Rs 20 crore and 17 crore respectively in FY22.
Chaayos competes with Bengaluru-based Mountain Trail Foods Pvt. Ltd, which operates the Chai Point network of tea stores. Chai Point has raised funding from Eight Roads, Paragon, Saama, and DSG Consumer.
Founded in November 2012 by IIT Bombay alumnus Nitin Saluja and IIT Delhi alumnus Raghav Verma, Chaayos raised $53 million in a Series C funding round led by Alpha Wave Ventures in May this year.
The company had also raised Rs 81 crore in a Series B round from SAIF Partners (now Elevation Capital), Hong Kong-based Integrated Capital and growth-stage Pactolus in September 2018. A year before that, it had raised around $2 million from Tiger Global Management.