Tea retail chain Chai Point snaps up $10M funding from Eight Roads Ventures, DSGCP, and others
Tea retail chain Chai Point has secured $10 million in a new round led by Fidelity’s proprietary investment arm, Eight Roads Ventures (formerly Fidelity Growth Partners India), with participation from Saama Capital and DSG Consumer Partners. The company will use the funds for expansion, hiring, and sprucing up its technology part.
Chai Point is one of the early entrants in the organised tea chain business and targets market of young working professionals via its network of stores, dispensers on corporate premises and a recently launched delivery business.
Earlier, the company had raised a seed round followed by a $2 million round by Saama Capital.
Amuleek Singh Bijral, the CEO and Co-Founder of Chai Point, said:
Tea consumption in India is eight-nine times that of coffee consumption. Chai Point’s goal is to create an aspirational brand for its young consumers for whom tea drinking is a part of their daily routine. We believe in building technology to rocket our accessibility and convenience goals for the brand and now will also be deploying a bulk of the investment proceeds towards this.
The company has built its own cloud-based software platform called Shark which connects the point of sale, supply chain, employee management, delivery system, and auditing etc. in one place.
Kabir Narang, Managing Director at Eight Roads Ventures, said:
We have been actively looking at opportunities in the F&B services sector and are excited to partner with Chai Point and its impressive management team. Chai Point’s multi format business model has been designed to make its product easily accessible to its core target market of young working professionals. With its focus on operations, supply chain and consumer experience, Chai Point is well positioned to emerge as one of the leading national brands in this space.
Besides Bengaluru, Chai Point has expanded operations to Delhi and Pune. It has also recently introduced ‘Chai on Call’ which allows customers to enjoy chai in their offices and homes using a specially developed use and throw heat retaining chai flask.
The tea market in India is estimated to be worth INR 33,000 crore and has been growing at a pace of 15% annually. Of late, tea retail market is largely unorganized and more than 90 per cent consumption happens through small vendors. However, over the past years startups have jumped to bring tea to the young and busy working class.
The company competes with Chaayos and Teabox. Chaayos, the NCR-based, tea-outlet chain had raised USD 5 million in funding from Tiger Global and Teabox from Siliguri has raised USD six million from Accel Partners to take Indian tea to the world.