Bengaluru-based tea retailer Chai Point has raised $20 Mn in Series C round of funding led by Paragon Partners. All existing investors – Eight Roads (Fidelity’s India PE arm), Saama Capital and DSG – also participated in this round, with some of them investing super pro rata.
Siddharth Parekh, Co-founder and Senior Partner of Paragon Partners will also be joining the Board of the Company. The DCS Advisory India (earlier Signal Hill Capital) was the exclusive advisor to the company for this fundraising.
The startup raised its Series B funding in 2015 and has raised a total funding of $34 Mn including the current funding round.
Commenting on the investment, Amuleek Singh Bijral, Co-founder and CEO, Chai Point said “This funding round is primarily aimed at further strengthening the brand’s multi-channel go-to-market. A substantial portion of our investment proceeds will go towards deepening our sales, marketing and service operations for our automated hot beverage dispending business – boxC.in – which is the next growth driver for the business.”
He further noted that they are going to expand and refine their underlying sourcing programme – “Garden to Glass” along with an especially enhanced food menu.
Chai Point was founded in 2010 by Amuleek Singh Bijral and Professor Tarun Khanna of Harvard Business School. Chai Point is an omnichannel startup with stores, delivery and fresh-milk based dispenser platform called boxC.in as its operating channels.
BoxC is an IoT-enabled automated tea and coffee dispenser for producing tea via tea leaves and not with tea bags and the tea tastes just like the tea prepared at home. It has two versions: one that is hardware automated and the other which is software automated.
AI provides details about consumer behaviour i.e. which tea – ginger, masala, green or black tea – consumers prefer to consume. The IoT aspect further helps the user to determine if there is any blockage in the machine. The machine has got sensors and in case of any blockage, it sends signals demanding maintenance requirements.
Siddharth Parekh further added, “We are bullish on the consumption story in India and are excited to partner with Chai Point. This investment is in line with our overarching investment theme of partnering high-calibre entrepreneurs with compelling business models.”
Chai Point is set to launch its 100th store in May 2018 and has deployed close to 2,000 fresh-milk based dispensers. The startup claims to have delivered 11 Lakh flasks so far. Key to Chai Point’s multi-channel capability is its proprietary cloud-based platform called SHARK.
The tea retailing market in India is said to be worth INR 1.5 Lakh crore. With the average per capita consumption of the beverage increasing at a steady rate of 20-30%, the market is ever expanding.
Other major players in this segment are Chhayos, Tebox, Udyan tea and more. Claiming to make over 0.3 Mn cups of chai a day across all its channels – stores, delivery and dispensers – Chai Point aims to do 5X more in the next three years.