Chaayos’ FY22 Loss Widens 35% To INR 71.2 Cr, Operating Revenue Jumps 2.4X To INR 135 Cr

Tea-cafe chain Chaayos’ net loss widened 35% year-on-year (YoY) to INR 71.2 Cr in the financial year 2021-22 (FY22) as expenses surged in line with the growth in business.

The startup had reported a net loss of INR 52.6 Cr in the previous fiscal year.

Chaayos, which earns a majority of its revenue from its cafes and kitchens, posted a 2.4X rise in sales revenue to INR 134.9 Cr in FY22 from INR 54.7 Cr in FY21.

While revenue from sale of products contributed INR 134.8 Cr to the operating revenue, the startup also earned INR 13.7 Lakh from revenue royalties. 

The startup, founded in 2012 by Nitin Saluja and Raghav Verma, uses an omnichannel business model to sell its flagship tea and pre-packaged snacks via physical outlets and online marketplaces. Chaayos claims that online tea deliveries account for 45% of its revenue.

Including its other non-operating income and interest income, Chaayos’ total revenue rose to INR 140.2 Cr in FY22 from INR 61.1 Cr in the previous fiscal.

On the expenses front, total expenditure surged 1.8X to INR 211.4 Cr in the reporting year from INR 113.7 Cr in FY21, with cost of raw materials accounting for almost 25% of it.

In FY22, Chaayos spent INR 52.3 Cr towards cost of materials consumed, a 2.6X jump from INR 20.2 Cr in FY21.

Meanwhile, the startup witnessed a 1.6X rise in employee benefit expenses to INR 51 Cr in FY22 from INR 31 Cr in FY21. While Chaayos spent INR 38.7 Cr towards salaries and wages, up 54% YoY, its expense on ESOPs also jumped 170% to INR 6.2 Cr in FY22.

Chaayos, which has been focusing on store expansion after the Covid-19 pandemic, spent INR 28.4 Cr towards rents in FY22, up over 38% YoY.

Meanwhile, advertising and promotional expenses jumped 168% INR 19.5 Cr in FY22. Along with digital space, the startup also increased its out-of-home ad spending in the latter half of 2021.

Chaayos also spent INR 16.9 Cr in FY22 on commissions paid to sole selling agents as against INR 5.5 Cr in FY21.

Chaayos’ most prominent competitor is Chai Point. It also competes with the likes of Third Wave, Starbucks, Costa Coffee, and other players in the cafe space.

The startup currently runs over 190 stores in cities including Bengaluru, Delhi NCR, and Mumbai. 

In June last year, Chaayos raised $53 Mn in its Series C funding round, led by Alpha Wave Ventures, along with participation from Tiger Global, Elevation Capital, and Think Investments. The startup has raised over $85 Mn in total funding till date.