DSG Consumer Partners invests in cold brew coffee retailer Sleepy Owl

Early-stage investment firm DSG Consumer Partners has invested Rs 3.5 crore (around $540,000) in Sleepy Owl Coffee Pvt. Ltd, which sells cold brew coffee under the Sleepy Owl brand.

Delhi-based Sleepy Owl said in a statement that it plans to use the seed funding to expand its product portfolio and grow its footprint across the country.

Sleepy Owl co-founder Ajai Thandi said the fresh infusion would help the firm streamline operations. He said the main focus for the year ahead would be to increase Sleepy Owl's existing customer base of 15,000 by increasing stock keeping units (SKUs), boosting retail presence and marketing.

Thandi, Ashwajeet Singh and Arman Sood had set up Sleepy Owl in June 2016. The company, which was incorporated last year, sells coffee through its ready-to-drink offerings as well as powder packets.

Its main market is Delhi-NCR.

Cold brew coffee involves steeping coffee beans in cold water for nearly a day, with no use of external heat.

Deepak Shahdadpuri, managing director at DSG Consumer Partners, said the segment is increasingly becoming popular around the world.

Trilegal acted as legal advisor to DSG Consumer Partners on the Sleepy Owl deal.

DSG Consumer Partners

DSG Consumer Partners has invested in Sleepy Owl through its second fund. The venture capital firm had marked the final close of its second fund at $50 million (Rs 319 crore) in August last year.

The firm, which focuses on investing in consumer-oriented startups, had also backed another beverage maker, cold-pressed juice manufacturer Raw Pressery. Its other bets include art venture Insignia Art Collect Pvt Ltd and tech-enabled motorbike rental startup Tazzo Technologies Pvt. Ltd.

DSG Consumer Partners’ first fund had raised $12 million and made 21 investments starting in 2013 including in mobile payments service provider Mswipe Technologies and personal coaching firm GOQii.

In February, DSG had put in Rs 10 crore in freeze-dried agricultural products company Saraf Foods Ltd.

Three months before that, Mumbai-based character merchandising startup Superhero Brands Pvt. Ltd raised a bridge round of funding from existing investor DSG.

Recent deals in the beverage space

Sleepy Owl joins a growing list of ventures in the beverage space to raise money.

While Raw Pressery raised $6 million (Rs 39 crore) last October, speciality tea e-tailer, secured $7 million (Rs 45 crore) in a Series B round from investment firm RB Investments and existing investors in December.

In the same month, Delhi-based tea e-tailer Vahdam Teas received $1.4 million (Rs 9 crore) in a Series A round of funding led by existing investor Fireside Ventures.

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