D2C Tea Brand Vahdam Bags INR 25 Cr

D2C tea brand Vahdam India has raised INR 25 Cr ($3 Mn) in a “strategic” funding round from SIDBI Venture Capital. 

In a statement, the startup said that the funding will help it strengthen its balance sheet and cash reserves. Interestingly, it also claimed that it is already well-capitalised, thus the fundraise isn’t a part of “formal” funding round. 

“Over the past two years, we have focussed on reinforcing our core, optimising our product portfolio, and identifying key levers for scale. The company is also making significant investments in product innovation, R&D, and expanding our in-house manufacturing capabilities. With a sharper focus and a more resilient foundation, we are well-positioned for sustained growth over the next three years,” Vahdam founder and CEO Bala Sarda said.

With the fresh round of funding, the tea startup has raised over INR 200 Cr in primary funding since inception. Besides SIDBI Capital, it counts Fireside Ventures, Sixth Sense, IIFL, among others, as its investors. 

Profitability On The Cards? 

The startup managed to nearly halve its standalone net loss in FY24, while seeing a healthy uptick in its top line.

Vahdam posted a loss of INR 12.5 Cr in FY24 as against a loss of INR 25.4 Cr in the previous fiscal year. Meanwhile, revenue from operations increased 14% to INR 95 Cr in from INR 83.3 Cr FY23. 

The startup claims to be on track to close FY25 with “strong growth and positive EBITDA”. It claims to be on track to close the fiscal with net revenue of over INR 265 Cr and EBITDA profitability.

The key reason behind EBITDA profitability, Vahdam claims, is its offline expansion into the US market. It said that its offerings are now present in over 2,000 Walmart stores in the country. 

Founded in 2015 by Sarda, Vahdam sources tea from partner farmers across India and processes and packages the end product at its own 1.25 Lakh sq ft facility in Delhi. Besides India, it operates wholly owned subsidiaries in key markets such as the US, Canada, the UK, and Europe.

The funding comes at a time when a number of D2C tea startups, like Aromica Tea, Dorje Teas, Udyan Tea, have emerged in the country over the last few years. 

Besides, the D2C sector as a whole is seeing strong growth. The Indian D2C market is projected to become a $300 Bn market opportunity by 2030 on the back of continued innovation and the emergence of new players across diverse categories.