Gurugram-headquartered tea cafe chain startup Chaayos has raised around $2 million from its existing investor Tiger Global Management in an internal round of funding.
The funds will be used by Sunshine Teahouse for expanding the chain of tea cafes, which it runs under the Chaayos brand, reported Mint.
Founded in November 2012 by Indian Institute of Technology (IIT)-Mumbai alumnus Nitin Saluja along with IIT-Delhi graduate Raghav Verma, Chaayos has set up its tea cafes in cities such as Delhi-National Capital Region (NCR), Mumbai, Chandigarh, and Karnal.
With 80 per cent of Chaayos’ revenues coming from its offline stores, an extensive offline presence will help the company chip away at the dominance of coffee chains such as Cafe Coffee Day and Star bucks across the country.
In 2015, Chaayos had raised $5 million in its Series A round led by Tiger Global. Ola co-founders Bhavish Aggarwal and Ankit Bhati also participated in the round.
Chaayos competes with the likes of Mumbai-based Tea Trails and Bengaluru-based Chai Point, which raised fresh capital from existing investors in August.
The startup is looking to trim all costs in a bid to reach profitability as early as next year. It claims that 15 out of 37 stores are over 2 years old and are operating at an EBITDA margin of 20 per cent. In less than 12 months, the startup will be cash positive at the company level on a month-on-month basis.
Other players in Cafe chain include Blue Tokai Coffee Roasters, which had raised funding from one of its existing investors; DropKaffe got $300K in a funding round led by Manish Singhal and P39 Capital and tea e-tailer Teabox.com, which had raised undisclosed amount from Ratan Tata to expand its global footprint, to name a few.