Delhi-based startup Chaayos, a cafe that serves customized tea has raised $5 Mn from capital firm Tiger Global Management Llc in Series A. This is Tiger’s first investment in a not-technology consumer startup in the country.
Founders of Ola Cabs, Bhavish Aggarwal and Ankit Bhati also participated in this round of funding. With the funding, Kalyan Krishnamurthy, managing director of Tiger Global Management will be joining Chaayos’ board.
Chaayos, currently runs eight cafes in the national capital region (NCR). Going forward, it aims to add over 50 stores, 25 stores in the NCR area and 25 in Bengaluru, Mumbai and Pune over the next one-and-a-half years.
Founded in November 2012 by Bombay IITian Nitin Saluja and Delhi IITian Raghav Verma, Chaayos works on a theme i.e. “Experiments With Chai”, it has over 25 varieties of tea, ranging from Indian teas like Pahadi chai and Irani chai to international teas like camomile and Moroccan mint tea. Chaayos also gives an option for its customers to customise their chai in their own way; basically it helps customers to discover their “meri waali chai”.
The company is currently selling about 100,000 cups of tea in a month, however expects to sell close to 3 Mn cups of tea in next 18 months. The startup also plans to open chai-on-demand stores, which will act as the small delivery centres to help the company meet larger target audience.
In April, Chaayos launched its mobile app, which allows customers to order food and tea on their phones and get it delivered at their doorstep. Currently the startup is receiving over 100-120 orders every day through its app which is operational only in Gurgaon as of now. However, according to Nitin, they are currently not pushing it’s mobile application.
Chaayos is betting that the next phase of its growth will be powered by tea delivery services and packaged tea blends that it sells through its cafés as well as on online marketplaces such as Amazon India, Snapdeal and online grocery store BigBasket.
The startup gets 45% of its revenue from food sold in the cafes, and is already generating profits at store-level. The company operates with gross margins as high as 65-70% and it closely competes with the Saama Capital-backed Chai Point. It also competes with various other outlets for different aspects of its business, such as for price conscious chai customers, the roadside thela and homemade chai, from an ambience point of view, Café Coffee Day, Starbucks and Dunkin’ Donuts are its competition. And for the freshly grilled sandwiches and sides that it serves, QSR chains like Subway and McDonald’s are competition for it.
Last year in July, Chaayos had raised over INR 2 Cr. in funding led by Zishaan Hayath from Powai Lake Ventures. Zishaan says, “This was one non-tech bet we made super early and then doubled down with a follow-on.”
Chaayos is targeting a market worth 5 million.