Amuleek Singh Bijral had some of the best offers from the corporate world after graduating from Harvard Business School. But those offers weren’t his cup of tea; so, Bijral did something that surprised even his closest friends – he set up Chai Point, an online tea selling business in Bengaluru and Noida five years ago.
Bijral obviously read the tea leaves well quite early in his career. Chai Point, which received Rs 12 crore from Saama Capital, is now looking to raise its next round of funding worth Rs 80-100 crore to finance plans to expand to Mumbai, Hyderabad, Pune and Chennai. Chai Point has 50 stores and claims to have sold 10 million cups of tea.
Bijral says there is no single organised player in India’s Rs 33,000-crore chai market and Chai Point targets white-collar workers across the country who are fast on technology and love the new experience of sipping tea. The idea is catching on – Chai Point’s latest app has seen about 12,000 downloads in the last three months. In the backdrop of rising real estate prices, Chai Point is keen to do a hub-spoke model in each city it plans to enter.
Bijral isn’t alone. Nitin Saluja, founder of Chaayos, ventured into the business after he started missing home-made ginger tea during his days in the US. In 2012, the IIT Mumbai graduate opened Chaayos in the National Capital Region along with IIT Delhi’s Raghav Verma. Both are in discussions to take the next leap in scalability and are in talks with venture capital investors to raise Rs 30-40 crore.
Investors seem to be getting interested in putting in more money, with good reason. Ankur Bisen, senior vice-president, at retail consulting firm Technopak, says, “Tea-based cafes have seen interest because Chaayos and Chai Point have demonstrated to investors that they can grow beyond local catchment areas to different cities,” Bisen adds. Replicating the success of Starbucks and Cafe Coffee Day through the chai business is an idea that has inspired many graduates from India’s premier institutes. A year ago, Pankaj Judge, an IIT Kharagpur graduate, opened his first outlet of Chai Thela in Noida with a plan to enter Delhi and Gurgaon. From aam aadmi chai to adrak chai, to tulsi chai, Chai Thela offers 30-plus varieties of tea through seven outlets in Noida. “We want to do with chai what Starbucks and Cafe Coffee Day did with coffee,” Judge says, explaining why the potential is huge. On average, each of his outlets sells 400-500 cups of tea per day. Chai Thela, which focuses on IT parks, hospitals and college campuses, is in discussions with angel investors to raise Rs 1 crore now and another Rs 12 crore after six months.
Recently, another firm TeaBox, an online retailer of premium tea, raised Rs 36 crore in fresh funds led by venture capital firm JAFCO Asia and existing investor Accel Partners.
TeaBox, which eyes international markets, plans to expand its footprint to the US, China, Japan, etc. “The high disposable income as well as influence of western culture have changed the lifestyle of Indians who like to consume high-end tea in the same way as they enjoy a good wine,” Kaushal Dugar, founder, TeaBox, says. Bisen says when a concept in the food services space reaches a decent size and show results, it starts attracting the fancy of investors. Agrees Prashanth Prakash of Accel India. “Most tea retailers continue to rely on a legacy value chain consisting of multiple middlemen,” he says. “But the renewed interest in category is bringing in a new set of retailers like Chaayos, who essentially would continue to be a part of the same set-up,” he adds.