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Exclusive: Subko Coffee raises Rs 80 Cr led by NKSquared

EntrackrEntrackr · 1y ago
Exclusive: Subko Coffee raises Rs 80 Cr led by NKSquared
Medial

Subko Coffee has raised Rs 80 crore in a new round led by Zerodha co-founders-backed NKSquared, said two sources aware of the investment. Several individuals along with Blume Ventures and Progressive LLP also participated in the financing round. “NKSquared has put in around Rs 70 crore whereas the remaining Rs 10 crore came from other investors,” said one of the sources requesting anonymity as talks are yet to be public. The company has received $5.5 million (Rs 45 crore) and NKSquared has already invested Rs 34.2 crore, according to the Subko Coffee regulatory filings with the Registrar of Companies (RoC). Blume Ventures and Progressive Strategies LLP collectively invested Rs 4.75 lakh. Pallavi Dempo, Suprapadh S Manohar, John Abraham, Kalpathi Ratna, and Suparna Gupta also took part in the financing round. As per sources, NKSquared has also acquired a 25% stake in the Mumbai-based firm. Subko Coffee has been valued at around $35-40 million (post-money), said the person quoted above. Queries sent to Subko Coffee NKSquared and Subko Coffee didn’t elicit any immediate response. We will update the story in case they respond. NKSquared was incorporated by Kamath brothers in 2019 but it became active last year and backed a few companies, including Nazara Games. Subko Coffee provides caffeinated drinks along with baked bread-pastries and coffee roasters. According to its filings, several celebrities such as Gauri Khan, Tiger Shroff, and others invested in the company between June 2022 to December 2023. Subko Coffee has been growing at a rapid clip and this could be evident from its growth in the last fiscal year. Its revenue spiked 94% to Rs 13.57 crore in FY23 from Rs 7 crore in FY22 while the firm’s losses stood at Rs 9.86 crore in the same period. Subko Coffee competes with Third Wave Coffee, Blue Tokai, Rage Coffee, Slay Coffee, Sleepy Owl, and Seven Beans Co. Notably, Third Wave Coffee is also backed by Zerodha’s co-founder Nikhil Kamath.

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Blue Tokai posts Rs 325 Cr revenue in FY25, cuts losses by 21%

EntrackrEntrackr · 1m ago
Blue Tokai posts Rs 325 Cr revenue in FY25, cuts losses by 21%
Medial

Blue Tokai posts Rs 325 Cr revenue in FY25, cuts losses by 21% Speciality coffee chain Blue Tokai Coffee Roasters has posted 50% year-on-year growth in its scale while simultaneously tightening its losses during FY25. India’s coffee culture continues to deepen and evolve, even as the market becomes increasingly crowded with new-age brands and speciality chains entering the space. Amid this intensifying competition, speciality coffee chain Blue Tokai Coffee Roasters has posted 50% year-on-year growth in its scale while simultaneously tightening its losses during FY25. According to the company’s consolidated financial statements accessed from the Registrar of Companies (RoC), its revenue from operations rose to Rs 325 crore in FY25, up from Rs 216 crore in FY24. The sale of coffee and related products remained the sole source of revenue for Blue Tokai in the last fiscal year. As per the company’s website, it now operates over 100 stores across India. On the cost front, the company spent Rs 113 crore on the procurement of products against sales of Rs 325 crore during the year. Employee benefit expenses also rose 24% year-on-year to Rs 94 crore in FY25. Meanwhile, expenses related to rent, logistics, marketing, and other overheads pushed total expenditure up by 35.3% to Rs 385 crore in FY25, compared with Rs 284.5 crore in the previous fiscal year. Despite this rise, tighter cost controls and operating leverage from higher revenues helped improve the company’s overall financial efficiency. As a result, Blue Tokai reduced its losses by 20.6% to Rs 50 crore in FY25, from Rs 63 crore in FY24. Key profitability metrics also showed improvement, with ROCE improving to -14.4% and EBITDA margin narrowing to -3.69%. On a unit economics level, the company spent Rs 1.18 to earn every rupee of revenue during the year. The improved scale and operational discipline appear to have reinforced investor confidence. During the year, Blue Tokai raised $25 million in a bridge round from its existing investors, taking its total funding raised to over $110 million to date. While some early coffee brands have exited over the years, new startups continue to enter India’s crowded specialty coffee market. Recently, Toffee Coffee, Notting Coffee and Sweet Karam Coffee raised pre Series A funding, while Chelbess Coffee, First Coffee and Subko Coffee also secured fresh capital from investors. The recent funding activity shows that investors continue to believe in India’s growing coffee market, even as brands focus not just on growth, but also on standing out, managing costs, and moving closer to profitability.

Blue Tokai posts Rs 216 Cr revenue with improved EBITDA margin in FY24

EntrackrEntrackr · 1y ago
Blue Tokai posts Rs 216 Cr revenue with improved EBITDA margin in FY24
Medial

Blue Tokai posts Rs 216 Cr revenue with improved EBITDA margin in FY24 Blue Tokai Coffee Roasters has achieved over five-fold growth in the past four fiscal years. The brand's revenue grew from Rs 41 crore in FY21 to Rs 75 crore in FY22, Rs 127 crore in FY23, and Rs 216 crore in FY24. Blue Tokai’s revenue from operations grew 70% year-on-year to Rs 216 crore in FY24 from Rs 127 crore in FY23, its annual consolidated financial statements sourced from the Registrar of Companies show. Income from the sale of coffee accounted for 93% of the overall operating revenue which stood at Rs 201 crore in FY24. The rest of the collections come from the sale of bakery products. Blue Tokai claims to have 130 outlets and plans to expand to over 350 locations in the next 3 years. The company also added Rs 5 crore from interest on deposits and gains on mutual funds, which tallied its overall income to Rs 221 crore in FY24 and Rs 129 crore in FY23. Moving towards the cost breakdown, employee benefits were the largest cost center, accounting for 29.5% of the overall cost, which increased by 95% to Rs 84 crore in FY24. Blue Tokai’s procurement costs increased by 46% to Rs 83 crore in FY24. Due to the notable expansion of the outlets, the rent cost surged 94% to Rs 33 crore in FY24. Its legal, advertising, communication, travel, and other overheads increased the total expenditure by 66% to Rs 285 crore in FY24 from Rs 172 crore in FY23. The surge in employee benefits and rent costs outpaced the revenue growth which led Blue Tokai to post a 46% increase in losses which stood at Rs 63 crore in FY24, compared to Rs 43 crore in FY23. However, the company improved its EBITDA margin, narrowing it from -24.7% in FY23 to -19% in FY24. Blue Tokai spent Rs 1.32 to earn a rupee during the fiscal year. By the end of FY24, the company reported current assets of Rs 153 crore, including cash and bank balances of Rs 61 crore. Blue Tokai has raised over $80 million to date including its $30 million Series C round led by Verlinvest in August last year. According to the startup data intelligence platform TheKredible, A91 Partners was the largest external stakeholder with 22.77% followed by Verlinvest. On the competition side, Third Wave Coffee posted Rs 240 crore of revenue with a loss of Rs 110 crore in FY24. While Starbucks India posted a whopping Rs 1,218 crore in revenue in the previous fiscal. Sleepy Owl, Subko Coffee, and Seven Beans are yet to post their financial results for FY24.

Third Wave Coffee revenue crosses Rs 240 Cr in FY24, losses up 2X

EntrackrEntrackr · 1y ago
Third Wave Coffee revenue crosses Rs 240 Cr in FY24, losses up 2X
Medial

Coffee chain Third Wave Coffee seems to be utilizing the VC funds the right way as the company managed to grow its scale at a scorching pace in the past couple of fiscal years: Its revenue from operations surged Rs 241 crore in the fiscal year ending March 2024 from Rs 32 crore in FY22. When it comes to year-on-year growth, Third Wave Coffee’s revenue from operations grew 67% to Rs 241.3 crore in FY24 as compared to Rs 144.4 crore in FY23, the company’s standalone financial statement sourced from the Registrar of Companies shows. The company is in the business of process, producing, packing, preserving, extracting, refining, buying, selling, and dealing in coffee and food products in and outside India. Third Wave Coffee made its entire revenue from sales of these products. Its products include coffee bags, coffee beans, and cold brews. As of October, the company has 114 cafes in India and plans to reach 160 by the end of the ongoing fiscal year (FY25). It is also looking to launch 80 to 100 coffee shops annually from 2025. The company claims that they’re roasting around 10-15k kilograms of beans per week. Other than its core business, the company also earned a non-operating income of Rs 6.61 crore during the year via interest and gains on assets. Overall, it made a revenue of Rs 247.9 crore during the last fiscal year. On the expense side, employee benefits turned out to be the largest cost element forming 27% to the total expenditure. This cost surged 68.8% to Rs 97.26 crore in FY24. The cost of materials doubled to Rs 87.61 crore while the company paid rent worth Rs 81.25 crore during the year. Importantly, the company spent only Rs 11.65 crore on selling and marketing. In the end, the company’s overall expenses went up 78% to Rs 358 crore in FY24 from Rs 201 crore in FY23. Despite the healthy growth in scale, the losses of the firm spiked over 2X to Rs 110 crore in FY24, which can be attributed to the excessive cash burn during the year, especially on employee costs and rent. Meanwhile, its operating cash outflows also rose 33% to Rs 81.57 crore. Its EBITDA margin and ROCE stood at -35.52% and -35.28%, respectively. On a unit level, Third Wave Coffee spent Rs 1.48 to earn a rupee of operating revenue in the last fiscal year. The company’s current assets jumped more than 5X to Rs 223.2 crore during the year while cash and bank balances grew multiple times to Rs 120.4 crore in FY24 from Rs 8.06 crore in FY23. At the end of FY24, Third Wave Coffee’s outstanding losses mounted to Rs 192 crore. As per TheKredible, the Bengaluru-based company has raised around $65 million to date from WestBridge Capital, Creaegis, and Redbrook, among others. It raised $35 million in funding in September 2023 and was valued at around $155 million (post-money). Third Wave Coffee competes with Subko Coffee, Sleepy Owl, Blue Tokai, Rage Coffee, Slay Coffee, and abCoffee among others. While the wave of Coffee sellers has made it a buyers market in some ways, coffee continues to chase the kind of premium buyer whose numbers remain a matter of conjecture in many ways. The low advertising and promotion costs indicate a smart hack, because it clearly hasn’t impacted growth, but the big challenge remains building the kind of loyalty that drives volumes at a steady clip, when aligned with planned expansion of the network. Like all retail businesses in India, the impact of rent remains disproportionate, and offers no relief really in a market that is still overheated, if not as piping hot as some of the coffee Third Wave offers. The path to profitability remains distant for now, even as Third Wave’s regular customers should be reassured that their preferred chain has enough runway to serve them for some time yet. Importantly, the chain seems to have done enough to raise a fresh round if the need arises.

Toffee Coffee Roasters raises pre-Series A round led by IPV

EntrackrEntrackr · 1m ago
Toffee Coffee Roasters raises pre-Series A round led by IPV
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Toffee Coffee Roasters raises pre-Series A round led by IPV Coffee brand Toffee Coffee Roasters has raised Rs 5 crore in pre-Series A funding round led by IPV along with participation from 66 bridge partners, Abhijit Vemuganti and Invesst. The startup was also featured on Shark Tank India and backed by Ritesh Agarwal. The proceeds will be utilized for expansion of operations, enhancing and expanding the backend roastery, improving packaging quality, and new product development as the brand continues to expand its portfolio. Co-founded in 2019 by Rishabh Nigam and Nandini Shrivastava, Toffee Coffee Roasters started as a specialty coffee cafe in Mumbai. During the 2020 lockdown, the brand pivoted to delivering freshly roasted coffees across India. It has since scaled to over 2 lakh customers through various channels and operates out of a 10k sqft roastery. The global coffee market is valued at $150–200 billion, while India’s coffee market stands at around $2 billion, showing a promising CAGR of over 20 percent. The company focuses on high-quality sourcing, roasting, and blending, ensuring better quality at competitive prices. Toffee Coffee Roasters currently produces over 5 tonnes of coffee monthly, aiming to scale production to 50 tonnes, which could support Rs 8-10 crore in annual revenue and reach 8-10 lakh customers. The company holds around 1-2% market share in the overall coffee category.

Third Wave Coffee’s scale grows 4.5X to Rs 144 Cr in FY23

EntrackrEntrackr · 1y ago
Third Wave Coffee’s scale grows 4.5X to Rs 144 Cr in FY23
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Coffee chain firm Third Wave Coffee secured $35 million led by homegrown private equity firm Creaegis in September last year. The funding was followed by its notable growth in scale during FY23. Third Wave’s revenue from operations surged 4.5X to Rs 144 crore in the fiscal year ending March 2023 as compared to Rs 32 crore in FY22, its annual financial statements filed with the Registrar of Companies show. Just like StarBucks, Third Wave Coffee offers curated food menus and handpicked coffee, and has over 90 cafes across Hyderabad, Coonoor, Bengaluru, Delhi (NCR), Mumbai, Chandigarh, and Pune. The firm claims to have about 109 stores, of which 50% are operational in Bengaluru. Income from the sale of coffee and food items were the two revenue sources for TWC. The firm also made Rs 2 crore from the interest on bank deposits which took its total income to Rs 147 crore in FY23. For Third Wave Coffee, its employee benefits emerged as the largest cost center accounting for 28.8% of the firm’s overall expenditure. This cost surged 3.8X to Rs 58 crore in FY23 from Rs 15 crore in FY22. Third Wave Coffee’s costs of procurements (coffee and food materials), rent, legal, freight-logistics, marketing, and other overheads took its total expenditure to Rs 201 crore in FY23 from Rs 47 crore in FY22. See TheKredible for the detailed expense breakup. Expenses Breakdown Total ₹ 47 Cr https://thekredible.com/company/third-wave-coffee/financials View Full Data To access complete data, visithttps://thekredible.com/company/third-wave-coffee/financials Total ₹ 201 Cr https://thekredible.com/company/third-wave-coffee/financials View Full Data To access complete data, visithttps://thekredible.com/company/third-wave-coffee/financials Cost of materials consumed Cost of materials consumed Employee benefit Employee benefit Rent Rent Legal professional Legal professional Travelling conveyance Travelling conveyance Transportation distribution Transportation distribution Discounting charges Discounting charges Selling and marketing Selling and marketing Others To check complete Expense Breakdown visit thekredible.com View full data The increase in employee benefits and rent led its losses to increase 3.6X to Rs 54 crore in FY23 from Rs 15 crore in FY22. Its ROCE and EBITDA margin improved to -38% and -25.9% respectively. On a unit level, TWC spent Rs 1.40 to earn a rupee in FY23. Third Wave has raised over $66 million to date including its $35 million Series C round in September last year. According to the startup data intelligence platform TheKredible, WestBridge Capital is the largest external stakeholder with 32.62% followed by Creaegis. As per Fintrackr’s estimates, its enterprise value to revenue multiple is 8.86X as of FY23. FY22-FY23 FY22 FY23 EBITDA Margin -38% -25.9% Expense/₹ of Op Revenue ₹1.47 ₹1.40 ROCE -47% -38% Towards the end of current fiscal year (FY24), Third Wave Coffee went through a tough phase as it laid off more than 100 employees soon after the $35 million fundraise. The company’s chief executive Sushant Goel also moved to a board role and Rajat Luthra, former head of KFC India and Nepal, was appointed as the new CEO. Goel had 7.89% stake in Third Wave Coffee. It competes with Blue Tokai, Sabko Coffee, Rage Coffee, Slay Coffee, Sleepy Owl, and Seven Beans Co., among others. Its closest competitor Blue Tokai registered Rs 129 crore in revenue with Rs 42 crore loss in FY23. While the mushrooming of coffee chains is not a surprise considering the rapid urbanization and aspirational whiffs around these, the sector has an unusual amount of volatility for the hospitality segment. Coffee chains by default seek the premium end of the market, leaving an opportunity for smaller setups to grab share in the lower price points, and perhaps even eventually add lower priced coffee to their offerings. Doing it all with an aura of cool can be a deadly combination for the newer coffee chains, and something they should watch out for.

Starbucks India posts Rs 1,218 Cr revenue in FY24; losses surge 3.2X

EntrackrEntrackr · 1y ago
Starbucks India posts Rs 1,218 Cr revenue in FY24; losses surge 3.2X
Medial

Starbucks India has emerged as the largest coffee chain in the country as the company left Coffee Cafe Day behind in terms of revenue during the fiscal year ending March 2024. However, the firm barely managed double digit growth in the said fiscal year and at the same time, its losses widened over three-fold. Tata Starbucks’ revenue from operations increased 12.05% to Rs 1,218 crore in FY24 from Rs 1,087 crore in FY23, its standalone annual financial statements filed with the Registrar of Companies (RoC) show. Starbucks For background, Starbucks India is a joint venture between Starbucks Coffee Company and Tata Consumer Products Limited. Launched in 2012, Tata Starbucks now operates in over 390 stores across 54 Indian cities, with approximately 4,300 partners. Its nearest competitor Coffee Cafe Day’s revenue stood at Rs 1,013 crore in FY24. As of March 2024, it had 450 stores. Starbucks also competes with several new-age coffee startups including Blue Tokai, Rage Coffee, Third Wave Coffee Roasters, Slay Coffee, Sleepy Owl, and Seven Beans Co among several others. Coming to Tata Starbucks revenue, the sale of coffee and related products formed most of its revenue. The rest of the income came from the loyalty program called My Starbucks Rewards where the customers earn loyalty points (Stars). For a coffee-selling company, the procurement of coffee beans, and other related products accounted for 26% of the total expenditure. To the tune of scale, this cost increased 8.5% to Rs 343 crore in FY23. Its employee benefits, rent, electricity, advertisement cum promotion, royalty, transportation, and other overheads took the firm’s overall expenditure to Rs 1,320 crore in FY24 from Rs 1,140 crore in FY23. See TheKredible for the complete expense breakup. Along with flat scale, Starbucks India’s losses surged 3.2x to Rs 80 crore in FY24 from Rs 25 crore in FY23. Its ROCE and EBITDA margin stood at 0.4% and 18%, respectively. On a unit level, the firm spent Rs 1.08 to earn a rupee in FY24. FY23-FY24 FY23 FY24 EBITDA Margin 19% 18% Expense/₹ of Op Revenue ₹1.05 ₹1.08 ROCE 3% 0.4% Coffee chains, by their very nature seek upscale locations, which means rental costs can be very high. Starbucks India, which is still in expansion mode with a possible target of 1000 stores by 2028, faces that challenge, besides the more obvious one of finding customers for its pricey offerings. Multiple startups encroaching in the same segment has not helped, as unlike the humble tea, coffee snobs are a very real thing, and many of the new upstarts have built a following accordingly. More than losses, Starbucks India will possibly be more focused on metrics like same store sales growth and footfalls for now, as its menu offerings have enough margins to deliver handsomely if footfalls increase significantly. The question is, will premium coffee find a deep enough market, or will it run up against the by now famously shallow middle class market?

Blue Tokai raises $25 Mn in a bridge funding round from existing investors

EntrackrEntrackr · 5m ago
Blue Tokai raises $25 Mn in a bridge funding round from existing investors
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Blue Tokai raises $25 Mn in a bridge funding round from existing investors Speciality coffee chain Blue Tokai Coffee Roasters has raised $25 million (around Rs 220 crore) in a bridge funding round from existing investors A91 Partners, Anicut, Verlinvest, and 12 Flags. The proceeds will be used to scale retail operations, strengthen back-end infrastructure, and expand into international markets such as Dubai and Japan. In India, the funds will also support new store launches and the expansion of its roasteries and bakery facilities in Bengaluru and Gurugram. Blue Tokai currently operates cafes across multiple Indian cities and has positioned itself as a premium coffee brand. The founders said they are revising their growth targets upwards. Earlier, the plan was to achieve Rs 1,000 crore in revenue and Rs 100 crore EBITDA by 2027. Now, the company aims for over 800 stores and Rs 2,000 crore revenue within the next four years. Blue Tokai has raised over $105 million to date, including its $30 million Series C round led by Verlinvest in August last year. According to the startup data intelligence platform TheKredible, A91 Partners was the largest external stakeholder with 22.77% followed by Verlinvest. As per TheKredible, Blue Tokai Coffee Roasters achieved over five-fold growth in the past four fiscal years. The brand's revenue grew from Rs 41 crore in FY21 to Rs 75 crore in FY22, Rs 127 crore in FY23, and Rs 216 crore in FY24. It competes with Rage Coffee, Third Wave Coffee Roasters, Slay Coffee, Sleepy Owl, and Seven Beans Co., among others.

Blue Tokai raises $35 Mn in Series C led by Verlinvest

EntrackrEntrackr · 1y ago
Blue Tokai raises $35 Mn in Series C led by Verlinvest
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Global investment platform Verlinvest has led a $35 million round in specialty coffee and bakery brand Blue Tokai. Existing investors Anicut Capital and A91 Partners also joined the Series C funding. This strategic partnership will enable Blue Tokai to deepen its presence in existing metro markets and expand into new tier I and tier II cities in India over the next three years, the company said in a press release. In January 2023, Blue Tokai raised $30 million in its Series B funding round led by A91 Partners. Led by co-founders Matt Chitharanjan, Namrata Asthana, and Shivam Shahi, Blue Tokai has partnered with several retail outlets, luxury hotels, restaurants, top corporates, and co-working spaces, among others. In the past 12 months, the company claims to have more than doubled its store count to 130 outlets. The funds will also be used to expand to over 350 locations in the next 30-36 months. Blue Tokai’s revenue from operations surged 72% to Rs 127.45 crore in FY23 from Rs 74 crore in FY22. According to startup data intelligence platform TheKredible, its losses also increased nearly 3.5-fold to Rs 43 crore in FY23, compared to Rs 12.3 crore in FY22. The company is yet to file its annual report for FY24. It competes with Rage Coffee, Third Wave Coffee Roasters, Slay Coffee, Sleepy Owl, and Seven Beans Co., among others. Among venture-funded startups, Third Wave Coffee was the largest brand in terms of revenue in FY23. However, the firm also experienced layoffs of more than 100 employees shortly after a $35 million fundraise in September last year. In March this year, Third Wave Coffee’s CEO Sushant Goel was replaced by Rajat Luthra from KFC. Earlier this week, GRM Overseas acquired a 44% equity stake in Rage Coffee through a combination of primary infusion and secondary buyouts.

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