Sunshine Teahouse Pvt. Ltd, which operates tea-focussed café chain Chaayos, has raised $21.5 million (Rs 153 crore at current exchange rate) in a mix of equity and debt funding, it said in a statement.
The $18.5 million equity portion of the round was led by Think Investments, a San Francisco-based firm, Chaayos said. Existing investors also participated, such as Tiger Global, SAIF Partners, Integrated Capital and former WhatsApp chief business officer Neeraj Arora.
The remaining $3 million was raised as debt from venture firm InnoVen Capital. The infusion into Delhi-based Chaayos marks InnoVen’s latest bet on an Indian startup. Other companies in its domestic portfolio include Swiggy, Dailyhunt, Byju’s and Awfis.
Chaayos co-founder and chief executive Nitin Saluja said the firm will continue to invest in its technological infrastructure and add to its team across all levels. It will also try to achieve the 300 café mark over the next three to four years, he added. Currently, Chaayos has nearly 100 outlets across the country.
“Our biggest validation comes from the 1.7 million registered guests that choose to come back to Chaayos at a very high frequency,” he said. The company was founded in November 2012 by Indian Institute of Technology-Bombay alumnus Saluja and IIT-Delhi graduate Raghav Verma.
Chaayos says it is a technology-led brand that offers a suite of services designed to increase operational efficiency, keep costs down and ensure customer retention. Some of the services include facial recognition, one-time password and chatbots. It claims a high customer repeat frequency of 3.5 times on a monthly basis.
This funding comes after the Delhi-based tea chain raised Rs 81 crore ($12 million) in a Series B round from SAIF Partners, 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. Other investors in the consumer brand include Powai Lake Ventures and Toppr.com founder Zishaan Hayath.
Some of the firms Chaayos competes with include Bengaluru-based Mountain Trail Foods Pvt. Ltd, which operates the Chai Point network of tea stores.
In August 2017, VCCircle exclusively reported that Chai Point had raised fresh capital from investors such as Eight Roads Ventures, early-stage investment firm DSG Consumer Partners and venture capital firm Samaa Capital.
In the broader tea sector, Delhi-based online retailer Vahdam Teas Pvt. Ltd raised Rs 75 crore ($10.5 million) in a Series C funding round led by Sixth Sense Ventures in October 2019. The family offices of Mankind Group and SAR Group as well as Infosys founder Kris Gopalkrishnan and Zomato co-founder Pankaj Chaddah also took part in the round. Fireside Ventures also participated in that round.