VG Siddhartha, Indian entrepreneur, 1959-2019

India’s ‘coffee king’ offered tea-loving nation a taste of global café culture

VG Siddhartha, who died this week in tragic circumstances, introduced coffee — and café culture — to tea-loving India, offering the nation’s aspirational new middle class a taste of a global lifestyle along with the cheery promise that “a lot can happen over coffee”.

Starting with a single cyber café on Bangalore’s busiest shopping street in 1996 and inspired by the autobiography of Starbucks’ Howard Schultz, India’s “coffee king” built the country’s most ubiquitous, homegrown retail brand, with more than 1,700 Café Coffee Day outlets.

In a socially conservative country with an acute shortage of public space, CCD cafés became popular hang-outs for backpackcarrying students, laptop-toting professionals, amorous couples and even affluent sari-clad women, reflecting the zeitgeist of an aspirational young nation emerging from decades of socialist austerity.

But even while developing one of India’s biggest consumer brands — and building successful midsize tech company Mindtree, — Siddhartha kept a low personal profile. A teetotaller with a passion for contemporary art, he shied away from publicity and the media spotlight, although his door was always open to young entrepreneurs.

Siddartha’s body was pulled from a river on Wednesday, a day after he purportedly left a note saying he had “fought for a long time but today I gave up as I could not take any more pressure”. His death has prompted an outpouring of grief both from the elite business community and ordinary Indians for whom Café Coffee Day was the stage on which the quotidian drama of their lives played out.

“He built India’s version of Starbucks,” said Mohandas Pai, a technology investor and former director at software group Infosys, in which Siddhartha was an early backer. “He was a great part of the tech ecosystem of Bangalore. This is very distressing to all of us.”

Deepu Sebin, the young founder of health-tech start-up Daily Rounds, also paid tribute to the late businessman. “We pitched our start-up ideas at CCD,” he wrote in a letter to Siddhartha shared on Twitter. “Many of us tasted the first cappuccinos from CCD. Some of us had our first date there...you built a brand the country will always be proud of. And you will always be an inspiration.”

Born in 1959 and raised on his family’s 400-acre coffee plantation in southern India’s remote Chikmagalur district, Siddhartha was educated by tutors at home and a small local boarding school, before graduating in economics from Mangalore’s St Aloysius College.

In 1985, after two years learning the ins and outs of equity trading as a research analyst in Mumbai, he set up his own stock brokerage in Bangalore, where he developed strong ties to the city’s nascent tech industry and married the daughter of a prominent Congress party politician. But he remained loyal to his roots in south India’s picturesque coffeegrowing region, acquiring his own expansive coffee estates.

In the early 1990s Siddhartha sponsored a delegation of South Indian coffee-growers to travel to New Delhi to appeal to then finance minister Manmohan Singh to relax the stifling state monopoly over coffee exports. When the market opened soon afterwards, he set up his Amalgamated Bean Coffee Trading Company to ship the crop from his estates and other growers.

By 1995, ABC was India’s largest exporter of unroasted beans, and the entrepreneur decided to set up a coffee chain to add value to his commodity. Initially, it was something of a sideline to his other ventures, including his brokerage and tech investments.

That changed in 2001, when the then 20-store chain starting attracting the attention of international investors — initially AIG, then Sequoia Capital in 2004, and KKR and New Silk Route in 2010, which all helped him fund an aggressive expansion.

In an interview with the FT in 2011, soon after KKR led a $200m funding round, he was upbeat about India’s economic prospects as well as his own, calling himself “lucky to be born at the right time in the right place”.

But Siddhartha had been under growing pressure since the 2015 Bombay Stock Exchange listing of his Coffee Day Enterprises, which not only held the coffee businesses but also his interests in real estate, logistics and tech.

Coffee Day shares never traded above the IPO price, frustrating some private equity investors seeking to cash out. Since 2017, Siddhartha had also been locked in a battle with India’s income tax department and other official agencies, which had seized some of his shares.

At the time of his death, his family and their entities had pledged about 75 per cent of their holdings in Coffee Day Enterprises as collateral for loans.

In the letter apparently written just before his death, Mr Siddhartha sounded despondent, talking about heavy pressure from lenders, the tax department and one of his private equity investors, which wanted him to buy out its shares.

It was far from his past optimism. “I have failed as an entrepreneur,” he wrote. But for the millions of Indians who wove CCD into the fabric of their lives, nothing could be further from the truth.