Tea chain Chai Kings has secured $1 million in pre-Series A bridge round from an angel investment group, The Chennai Angels (TCA). Hyderabad Angels and TiE India Angels have also participated in this round.
The Chennai-based company offers tea in various flavors.
Piyush Bhandari, who led the investment from TCA, said, “We are very excited to partner with Chai Kings in the bridge round. We believe the company has a strong leadership team with immense potential to grow and expand across India. The new investment reiterates our commitment towards building a sustainable and scalable Indian QSR.”
Chai Kings delivers tea at customers’ doorstep anywhere in Chennai. The brand uses food-grade, use-and-throw, heat-retaining flasks for safe consumption, ensuring the tea is piping hot for at least an hour.
Jahabar Sadique, CEO of Chai Kings, said, “We are happy with the success and progress of our brand in Chennai, and this funding round will help us expand into newer cities.”
Chai Kings is aiming to reach a 100-store mark in the next five years. The brand aims to be the favorite chai place across India.
Started in 2016, Chai Kings is currently operating 40 stores in the country.
“We hope to enter Coimbatore, Bengaluru, and Hyderabad in this year, and get closer to our target of 100 stores in five years. Apart from expansions, the bulk of this funding will be utilised to strengthen our operations and supply chain management,” Sadique added.
Indian tea café market
Chai is more than just a cup of tea to start the day in India. It is a drink that Indians can’t live without. Indians have been obsessed with tea for almost forever. The obsession can be seen by the fact that Indians drink around 30 cups of tea for every cup of coffee. The country consumes 837,000 tonnes of Tea every year. With such a high consumption of the drink, Chai QSR franchises are emerging as a huge business opportunity.
Tea Franchise: A lucrative business model
A tea franchise is a lucrative business model because of the fewer requirements it needs to start it as a business. For instance, a tea stall requires tea leaves, water, sugar and other kitchen equipment as their basic requirement. And, in a franchise model, you just have to add up the costs of decor, seating inventory, and employees’ salaries, which also do not require much of an investment.
As per sources, a small tea franchise can be started in an average investment of Rs 9-15 lakhs (investment amount increases with the size of the outlet) for the area of about 100-500 sq ft. All of this together makes tea franchise everyone's cup of tea.
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