It was to ensure the delivery of freshly brewed cups of coffee right to the doorstep during a busy day, that led Lakshmi Dasaka, Chaitanya Chitta, Rakshit Kejriwal and Amar Yashlaha to come up with the idea of DropKaffe.
Lakshmi, Rakshit and Chaitanya have known each other for several years. The three of them worked together at KPMG New York between 2006 to 2011. In 2013, they all moved back to India to start SmartOn, an online education startup. Amar is also a friend from their New York days and was involved in SmartOn as an angel investor. The four of them got together to start DropKaffe, formally in April, 2015.
"We were impressed by the coffee culture in the US. After coming back to India, it was substituted by varied options. We had a guy to just fetch coffee four to five times in a day. We were intrigued if this problem is only ours or everybody else’s," says Chaitanya. So they decided to test the market to find out if indeed there was a demand for a service like this. The response to that survey left Chaitanya overwhelmed.
"Within 10 days, over 5,000 people in Bengaluru echoed our sentiments. That’s when we started DropKaffe to address everybody’s caffeine fix," adds Chaitanya.
At a tactical level, the team started with the proposition that office coffee sucks. So he adds that they are solving caffeine issues in terms of quality, affordability and accessibility. Chaitanya says that DropKaffe is your own cafe in the cloud. "We're making our customers reimagine coffee by bringing wider choices at a price that doesn’t hurt you. We are an affordable luxury," says Chaitanya.
For DropKaffe, it was important that the customer gets the same taste and experience every time. To ensure that, DropKaffe decided to take in complete ownership of the coffee brewing process. Right from sourcing the ingredients, to grinding, brewing and delivering them.
The team believes that India still lags behind when it comes to packaging. While there's a boom in food delivery, the support ecosystem is still trying to catch up. Therefore, addressing issues of spillage and insulation among others is what DropKaffe is looking at very consciously.
"We are working with traditional packaging companies to come with products that never existed before, with their experience and our customer insights and needs," he adds.
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On the hiring side, keeping the DropKaffe coffee angels motivated is a challenge. With additional attention to details such as providing them good, safe and productive working conditions like place for them to sit, onsite lunch, access to clean restrooms among other things. The team is also looking at giving them opportunities to grow. "Three of our coffee angels have been promoted to dispatch managers by now," adds Chaitanya.
Speaking about their core values, Chaitanya says "Our company is customer centric, we breathe ‘Customer First’. We believe that ideas can come from anywhere. It is a collaborative effort. Sometimes we get ideas from our coffee angels and we act on those. We encourage free flow of ideas across teams."
DropKaffe has close to 10,000 users and is live in five locations across Bengaluru. Over 80 per cent of revenues come from their repeat customers. The team is doing close to 300 orders per day and is expecting to cross 1000 orders in a day in the next 3-4 months. DropKaffe brand penetration and geographic expansion are the two key enablers for their growth. Chaitanya adds that their break-even point in any location happens within the first four to five months of setting up operations.
The team has raised a pre-series A funding of USD 300,000. This Chaitanya says, gives them enough cushion to bring DropKaffe across Bengaluru. Chaitanya says they are excited working with some smart and strategic angel funds that took part in this round. They are a mix of food entrepreneurs, people who have built brands, serial entrepreneurs from geographies as diverse as Singapore, US and India. "Our lead investors are Ray Nathan out of Silicon Valley and Manish Singhal from Bengaluru," adds Chaitanya.
The team will be using their seed money for three broad areas. These are talent, expansion and technology. On the expansion front, they will be setting up six more DropKaffe fulfillment centres taking it to 10 by the end of October. The team wants to make DropKaffe available to every Bangalorean. To make this experience seamless, they are working on native app, Dial a Coffee, plain text and other solutions.
From November, the team is considering scaling up to Chennai, Hyderabad and Pune. Chaitanya says that since the demographics are similar, and the product fit is there and Chennai is under penetrated, the teamis looking forward to it. From a brand standpoint, they'll start getting into making DropKaffe cold beverages.
"We’ll productise cold coffee and smoothies and make it available through channels that give customers access and give convenience. We anticipate to do more channels like Faasos. Our proposition is freshly made, no preservatives, healthy, delicious drinks that customers can consume at their convenience," adds Chaitanya.
They also will be starting out with a subscription service soon. Given the amount of repeat behaviour the team sees, they want to give their customers the ability to plan their order well in advance. "We consider anyone who is doing beverages as our competition. Be it a Chai Point or a Paperboat. In the broader sense, there are 260 on-demand food companies. So that’s also our competition," says Chaitanya.
Chaitanya says nobody delivers you coffee at your doorstep. DropKaffe does it for you and therein lies the differentiator. He adds that they are building India’s first online coffee and Cafe brand and thereby hoping to disrupt the backend coffee supply chain, innovate on coffee making and packaging and most importantly bring choices that customers didn’t have in the past.