Sleepy Owl Coffee Pvt. Ltd, which owns a ready-to-drink coffee brand, said on Wednesday it has raised funding led by investment firm Rukam Capital.
AngelList India and Deepak Shahdadpuri-helmed DSG Consumer Partners, an existing investor, also participated in the round, Sleepy Owl said in a statement.
The Delhi-based company said it will use the funds to expand its operations, strengthen its distribution channels and launch new products. However, the firm didn't disclose the amount it raised.
“The coffee lovers’ landscape has evolved across the globe and the cold brew coffee concept has gradually seeped into the Indian markets as well,” Ajai Thandi, co-founder at Sleepy Owl, said.
Separately, Rukam Capital managing partner Archana Jahagirdar said the firm was confident in its investment because of its growth pattern since its launch and the potential of its brand within the larger coffee space.
“They have demonstrated product-market fit in their first two markets of Delhi and Mumbai and will continue to build their presence in these core markets,” Shahdadpuri added.
Sleepy Owl was founded by Thandi, Ashwajeet Singh and Arman Sood in June 2016. It sells products through ready-to-drink offerings and powder packets.
The company also offers products in the hot-brew space. It currently has a presence in over 1,000 outlets and claims to have catered to more than 60,000 customers since its launch. Its products are also available through its online store and e-commerce platforms such as Amazon.
In April 2018, the startup raised Rs 3.5 crore (around $540,000) in funding from DSG. At the time, Thandi said the capital infusion would help the firm in streamlining its operations.
Rukam Capital, set up last year, is a New Delhi-based venture capital firm that is focussed on investing in early-stage consumer products and services companies. Some of the sectors it serves include food and beverages, beauty and personal care, health and nutrition, and fashion.
Apart from Sleepy Owl, companies in its portfolio include Burger Singh, Orange Retail Finance, beverages maker Svami and spices and snacks maker Go Desi.
DSG Consumer Partners, meanwhile, is one of the well-known firms in India’s VC ecosystem. It focusses exclusively on early-stage businesses in India and Southeast Asia. Currently, it has $100 million in assets under management.
In August last year, it marked the final close of its third fund at $65 million (Rs 465 crore), overshooting the target of $50 million. At the time, Shahdadpuri said the fund’s anchor investors are Belgian private investment firm Verlinvest SA, a New York-headquartered single-family office, a global fund of funds and a Middle East single-family office.
Companies in the DSG Consumer Partners portfolio include yogurt maker Epigamia, mother and baby-care venture The Mom’s Co, craft beer startup Goa Brewing Co, vegan personal care brand Arata, hospitality chain OYO, mobile payments provider Mswipe Technologies, specialty food ingredients maker Veeba Foods and rating platform Eazydiner.