Quick service restaurant chain Third Wave Coffee, operated by Heisetasse Beverages Pvt Ltd, on Thursday said it has secured $35 million (Rs 291 crore) in a Series C funding exercise led by homegrown private equity fund Creaegis, with participation from existing backers Westbridge Capital and Udaan founder Sujeet Kumar.
The Bengaluru-based startup plans to deploy the fresh proceeds for expansion, scaling up supply chain and developing its technology stack.
In June, VCCircle had first reported that Creaegis’s is planning to invest $20 million (Rs 164 crore) in Third Wave Coffee.
Founded by Ayush Bathwal, Anirudh Sharma and Sushant Goel in 2017, Third Wave Coffee is operated by Heisetasse Beverages Pvt. Ltd and it currently operates around 100 stores across major Indian cities, including Bangalore, Mumbai, Delhi, Gurgaon, Pune, Hyderabad, Noida, Coonoor and Chandigarh.
"Coffee-first QSR industry is one of the fastest-growing consumer categories in the country. We have grown 5x through the last year and strategically expanded our footprint across the nation. Going forward, we will continue to double down on technology and product innovation,” said Goel.
Prior to the current funding round, Third Wave Coffee had raised $21 million in a Series B round which was led by WestBridge Capital and saw participation from marque angel investors.
The company posted net sales of Rs 31.7 crore during FY22 as against Rs 11.5 crore a year before. The company hadn't turned operational breakeven till FY22, as per VCCEdge.
Third Wave Coffee competes with the likes of another homegrown coffee brand Blue Tokai Coffee Roasters, which also raised around $30 million in January this year.
Third Wave’s funding is indicative of the increased interest of institutional investors in the Indian coffee space. Despite the presence of large incumbents like Nescafe, Starbucks and Cafe Coffee Day brands such as Slay Coffee, Sleepy Owl Coffee and Rage Coffee have been able to raise funding from VCs in the recent past, thus pitting them against the larger players.
Meanwhile, Creaegis made history last week by raising the biggest amount in rupee terms by a first-time general partner in India as it hit the final close of its debut fund, beating the decade-old records set by Kedaara Capital and CX Partners.
The mid-market PE firm which was started by former PremjiInvest managing partner and investment chief Prakash Parthasarathy in 2019 secured $425 million in commitments for its maiden investment vehicle, thus wrapping up the fundraising exercise.
On Wednesday, the PE firm led the $35 million Series B funding round of healthtech startup Doceree, thus making it its second investment in the healthtech space. It had previously invested in business-to-business (B2B) online marketplace for medical supplies Medikabazaar. The firm’s portfolio also includes enterprise SaaS firm Kale Logistics and insurtech startup Zopper.
