With $5 million from Tiger Global, what has Chaayos been up to
As per an interesting legend, tea drinking in India began almost 2,000 years ago when a saintly Buddhist monk accidentally came across wild tea plants. Over centuries, it has become a part of culture. Whenever one talks of tea, there are discussions around where it comes from, what kind of leaves it is made of and the joy of the entire process of drinking it. But suddenly, in the startup circles in India, tea is being looked at from a different angle all together. Chaayos, the NCR-based, tea-outlet chain had raised USD 5 million in funding from Tiger Global. Chai Point is another upcoming and fast-growing tea-outlet chain and Teabox from Siliguri has raised USD six million from Accel Partners to take Indian tea to the world. Why has ‘chai’ become so exciting now? Where’s the tech in chai?
The innovation or investment is not on the agri-tech side but more on the distribution, standardisation and scale side of things. It has been close to four months since Chaayos raised its funding round from Tiger Global and we got in touch with founder Nitin Saluja to understand what the company has been up to. “We get this question a lot: why did someone like Tiger invest in a chain of tea outlets?” says Nitin. He goes on to explain the situation: On the face of it, Chaayos is a chain of tea outlets but there is a bigger underlying vision. The company wants to become part of every chai occasion for the consumer. And the outlet is just a start.
For any dine-in experience, the outlet hardly knows anything about the consumer. And to improve the experience, all the pieces around the outlets need to work together. Until recently, Chaayos ran third-party software at its outlets to streamline processes. The software did the basic job but did not leave any scope for improvement. Post funding, Chaayos has put together a strong team of 10 to work on its in-house software, which will link everything from its tea collection to outlets and all the information will speak with the data coming in from the app on the user’s side.
“Engineers have joined from premier institutes and the pitch to them is: ‘You’ll build the backbone that runs the entire system at Chaayos’,” Nitin adds. He gives an example: a recent hire from Flipkart is working on the problem of reducing turnaround time at an outlet. Every aspect of the business is tracked and the idea is to have a standardised ‘Chaayos experience’ at every store.
Then there is the ‘chai-on-demand’ service. “Chai is something people have regularly and we were surprised with the massive response we got for our chai-on-demand service in NCR,” says Nitin. Chaayos has tied up with upcoming logistics companies and promises a 30-minute delivery to the entire NCR area. The company is now working towards getting this time down to 15 minutes.
The supply for orders comes from tea units Chaayos has built apart from the outlets. The café outlets also double as chai-on-demand units. But, Chaayos is setting up smaller tea units for areas like Lajpatnagar in Delhi, where a full-blown outlet doesn’t make sense.
Chaayos has 10 cafés in NCR and Mumbai, with a few more planned for cities like Bengaluru. The total headcount for the company has reached 200 and after launching chai-on-demand in June this year, Chaayos is doing 500 orders a day. Out of these, 50 per cent comes from the app, 35 per cent from the contact centre and remaining from partners like Swiggy, TinyOwl, FoodPanda and Zomato. Many consumers are ordering chai for occasions like get-togethers or orders from the office.
The tech platform that took the team a good six weeks to build will be rolled out in all the outlets next week. “This will give us a lot of leverage in terms of capability and will allow us to know the customer better,” says Nitin. Chaayos is hiring for all areas and is moving: “We want to be part of consumers’ every chai occasion. And we will!” he says.