Tea brand Chai Point has raised $20 million in Series C round led by Paragon Partners. Existing investors – Eight Roads, Saama Capital and DSG also participated in the funding round.
Following the investment, Siddharth Parekh, Senior Partner, Paragon Partners will join the tea retailer board, mentions a company press statement.
The company will deploy funds for deepening its sales, marketing, and service operations for automated hot beverage dispensing business – boxC.in – which is the next growth driver for the business.
With 100 stores in 8 cities, Chai Point claims to be the largest tea retailer in the country followed by Chaayos and others. The Company says that it sells about 300K (3 lakh) cups of Chai a day across all its channels – stores, delivery, and dispensers.
At present, about 85 per cent of its revenue comes from the hot-and-cold chai offerings and the rest from food. Rest 15 per cent revenue comes from its B2B arm. The company eyes to sell 1.5 million chai cups on a daily basis by 2021.
Paragon Partners is a private equity firm focusing on the lower mid-market segment in India with $120 million corpus. So far, Chai Point had raked in about $34 million risk capital from the aforementioned investors.
The Bengaluru-based tea chain was also exploring the possibility of entering into alliances with local partners in China. In India, the firm closely competes with another startup Chaayos in the same space, which raised $2 Mn from Tiger Global Management in October last year.
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.