Tea chain Chaayos raises funds from Tiger Global Man­age­ment

Mint ST - - DEALS - BY KAVYA KOTHIYAL kavya.k@livemint.com MUM­BAI

Tea cafe chain Chaayos has raised close to $2 mil­lion from its ex­ist­ing in­vestor Tiger Global Man­age­ment in an in­ter­nal round of fund­ing, said two peo­ple fa­mil­iar with the de­vel­op­ment.

Chaayos was founded in Novem­ber 2012 by In­dian In­sti­tute of Tech­nol­ogy (Iit)-mum­bai alum­nus Nitin Saluja along with Iit-delhi grad­u­ate Raghav Verma. The Gur­gaon-head­quar­tered start-up has set up its tea cafes in cities such as Delhi-na­tional Cap­i­tal Re­gion (NCR), Mum­bai, Chandi­garh and Kar­nal.

“Chaayos has re­cently raised funds from its main in­vestor Tiger Global. The funds were raised through a rights is­sue, which was closed a few weeks ago. Tiger Global in­vested close to $2 mil­lion in the com­pany in the round. A few in­di­vid­u­als also par­tic­i­pated in the round,” said one of the two peo­ple cited above, re­quest­ing anonymity.

The funds will be used by the com­pany for ex­pand­ing the chain of tea cafes, which it runs un­der the Chaayos brand, he said.

“An­other tea cafe chain, Chai Point, also raised some funds from its ex­ist­ing in­vestors a cou­ple of months ago and thus this fund-raise should help Chaayos keep up with the com­pe­ti­tion,” the per­son said.

Tiger Global de­clined to com­ment.

Saluja de­clined to com­ment on the fund-raise. “Be­ing the leader of the chai cafe mar­ket, we have con­tin­u­ously im­proved cus­tomer ex­pe­ri­ence by in­vest­ing heav­ily in prod­uct de­vel­op­ment, tech­nol­ogy and ser­vice. Chaayos is grow­ing rapidly to reach the 50-cafe mark by end of this month,” said Saluja in his email re­sponse.

In the cur­rent fi­nan­cial year, Chaayos is well on its way to nearly tripling its rev­enues by grow­ing to 70 cafes, he said.

“This growth is com­ing on the back of strong same store sales growth and high cus­tomer re­peat, thus mak­ing us cash-pos­i­tive. Tiger has been a very sup­port­ive part­ner on this jour­ney be­cause of strong fun­da­men­tal growth,” Saluja added.

Tiger Global first in­vested in Chaayos in May 2015, when it made a bet of $5 mil­lion on the tea cafe chain.

In Au­gust, on­line por­tal En­trackr.in re­ported that Chai Point had raised an undis­closed amount of fund­ing from its ex­ist­ing in­vestors. Chai Point, run by Moun­tain Trail Foods, counts Eight Roads Ven­tures, DSG Part­ners and ex­ist­ing part­ner Saama Cap­i­tal, as its in­vestors.

The Ben­galuru-based tea chain is cur­rently op­er­at­ing in Ben­galuru, Delhi, Gur­gaon, Noida, Mum­bai, Pune, Hy­der­abad and Chen­nai.

Oth­ers in the sec­tor who have raised funds in­clude Te­abox.com, an on­line seller of pre­mium tea, which raised $6 mil­lion from ven­ture cap­i­tal firm JAFCO Asia and ex­ist­ing in­vestor Ac­cel Part­ners, along with Key­stone Group Lp and Dragoneer In­vest­ment Group, Mint re­ported in March 2015.

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