Tea-focused café chain Chaayos has raised $45 million (Rs 350 crore) in its Series C round of funding from a mix of new and existing investors.
The round is said to have valued the company between $225-250 million.
While Alpha Wave Ventures led the round as new investor, the company’s existing backers including Tiger Global Management, Elevation Capital and Think Investments also participated.
Chaayos had earlier this year announced that it is bullish on offline expansion and is planning to open 500 chai cafes in next 2-3 years. The company was primarily looking to raise funding to open physical stores.
Chaayos now has over 150 operational cafes across Delhi NCR, Mumbai, Pune, Bengaluru, Chandigarh, Hyderabad, Chennai and Karnal.
In a sector which was hit hard during pandemic disruption, Chaayos still managed to grow due to 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.
While fresh food and tea are delivered from the existing retail stores, packaged products are retailed across its website and major e-tailers such as Amazon, Flipkart and BigBasket. At present, offline accounts for 40% per cent of the company’s total sales and the rest comes from online including its own store chaayos.com and fast e-commerce players.
The Delhi-based tea chain 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.
US-based Tiger Global had also led a $5 million Series A round in 2015, with participation from Ola co-founders Bhavish Aggarwal and Ankit Bhati. Not just equity, the company had even secured funding through debt route from the likes of Alteria Capital and InnoVen Capital.
Some of the firms Chaayos competes with include Bengaluru-based Mountain Trail Foods Pvt. Ltd, which operates the Chai Point network of tea stores. Chai Point had in the past pocketed finance from strategic investors as well as venture debt funds.