Tea e-tailing startup Vahdam raises Series A funding

Vahdam Teas Pvt. Ltd, a Delhi-based tea e-tailer, has raised $1.4 million (Rs 9 crore) in a Series A round of funding led by existing investor Fireside Ventures.

Other existing investors Singapore Angel Network, Mumbai Angels and a few high net-worth individuals also participated in the round, the company said in a statement.

As part of the deal, Fireside founder Kanwaljit Singh will join the company's board.

The company said it will use the fresh funds on marketing and product development, in addition to strengthening its warehousing and logistics capabilities in the key US market.

Founded in 2015 by Bala Sarda, Vahdam Teas runs an online platform through which it ships Indian tea to customers globally.

The company procures its teas from about 100 plantations across India and Nepal. It claims it vacuum-packs the tea in 24 to 72 hours of production and ships it within the following 24 hours to keep the products fresh.

Vahdam stocks more than 100 varieties of tea based on the season and harvest region. Users can sign up for tea subscription and receive a pack of five different teas every month.

It’s a direct-to-consumer tea brand that generates 100% of its sales online, primarily on its website. According to the company, it has grown seven-fold in the past 12 months, The US accounts for 70% of its revenue. The remaining 30% comes from about 83 countries it operates in.

“Over the last two years, we have worked very hard in setting up an efficient supply chain, right from the estates of India to our consumers in the US and other parts of the world…We plan to now further penetrate our key markets with customer acquisition and marketing,” Sarda said.

The firm had raised Rs 4.4 crore ($650,000) from early-stage investment firm Fireside Ventures’ Kanwaljit Singh, Mumbai Angels and Singapore Angel Network.

Vahdam Teas competes with the likes of Bangalore- and Singapore-based tea exporter Teabox, which has received funding from Tata Group’s Ratan Tata and Accel Partners among others.

A number of other tea startups in India have also raised funding over the past couple of years. Delhi-based tea café operator Chaayos and Bangalore’s Chai Point have previously attracted investors such as Fidelity’s proprietary investment arm, Eight Roads Ventures, and Tiger Global.

These new-age tea retail startups are aiming to change the way the popular beverage is consumed in India, the world’s second-largest grower and biggest consumer of tea.

Chai Point, operated by Mountain Trail Foods Pvt. Ltd, had raised $10 million led by Eight Roads Ventures in September 2015.

Chaayos, run by Sunshine Tea House Pvt. Ltd, had secured $5 million in its Series A round of investment led by Tiger Global in 2015.

In November last year, tea retail startup Chai Thela raised Rs 1.5 crore in seed funding from early-stage investment firm Quarizon.

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