Vahdam Teas Raises $10.5 Mn Series C Funding Led By Sixth Sense Ventures

Delhi-based online tea brand Vahdam Teas has announced a Series C funding round of INR 75 Cr ($10.5 Mn). The company said that the fresh funding round has been led by consumer fund Sixth Sense Ventures. Other investors in the round include family offices and HNIs such as Mankind Group Family office, Infosys founder Kris Gopalkrishnan, SAR Group Family office, Zomato Cofounder Pankaj Chaddah, Urmin Group family office, etc.

Existing investor Fireside Ventures continued to back the company with the Series C funding round. With this, the total funding raised by the company to date is over INR 110 Cr ($15.4 Mn).

Bala Sarda, founder and CEO, Vahdam Teas said, “With the current fundraising, we aim to further penetrate key markets, invest heavily in research and development, launch innovative products, enter new markets globally and further strengthen our management team.”

Vahdam Teas: Eyes Expansion And Growth

Vahdam Teas will use the funds to expand the company’s presence in the USA and Europe. The company said it will also launch new products and enter new markets like South Asia, India and UAE.

Founded in 2015 by Bala Sarda, Vahdam Teas is a vertically-integrated, online-first tea brand. All Vahdam teas are procured directly from 150-200 plantations and tea growers in India and Nepal within 24-48 hours of production. After thorough processing, cleaning and packaging, the teas are shipped to international markets within three to twe days

Nikhil Vora, founder and CEO of Sixth Sense Ventures, said, “Vahdam is an interesting example of how a traditional business like tea can get disrupted. Impressed with the way Bala has sought to target the global markets first, create a brand salience and market innovative ethnic Indian tea flavours.”

The company also plans to open a UK office early next year. It will further invest in a  state-of-the-art packaging facility to expand manufacturing and cater to demand for the next three to five years.

“Vahdam has successfully established itself as a digitally native brand in the US and Europe market and is well on its way to becoming a mainstream brand across geographies and channels,” said Kanwaljit Singh, founder and managing partner at Fireside Ventures.

India’s Tea Market

India is the seventh-largest coffee and the second largest tea producer in the world. Interestingly, 83% of Indians prefer tea to coffee. However, the tea in India i.e. chai is a concoction of tea blend with water, sugar and milk. The premium tea market that Vahdam Teas caters to is an unadulterated version of India’s chai.

Despite their high prices when compared to the more ubiquitous CTC (crush, tear, curl) tea market in India, the opportunity for premium teas is huge and is growing at 40-50% annually. There is a rapidly emerging shift towards healthier options in all beverage categories, and millennial and Gen-Z audiences are increasingly opting for green teas, healthy teas, single estate blends and other niche tea options.

The competitors catering to premium tea demand in India include Udyan, TeaBox, Kettlery, and Infinitea among others.