Consumer sector-focused Belgian investment firm Verlinvest on Saturday said it has led a funding round of $35 million in Blue Tokai Coffee at a valuation of about $180 million, acquiring a significant stake in the Indian specialty coffee maker.
The Series C round, which also saw participation from existing investors Anicut Capital and A91 Partners, will be used by Blue Tokai to deepen its presence in existing metro markets and expand into new Tier I & II cities in India over the next three years, per a media release.
Founded in 2013 by Matt Chitharanjan, Namrata Asthana and Shivam Shahi, Blue Tokai claims to have more than doubled its store count in the last year to 130 outlets currently, delivering a range of specialty coffee products and artisanal bakery goods.
The newly acquired funds will be used to expand to over 350 locations in the next 30-36 months, drive new product innovation, and expand to new channels.
Shahi said the firm is experiencing a significant surge in demand for quality coffee and bakery products, adding that it has been steadily adding five cafes each month for over a year.
“We will utilize these funds to accelerate our expansion across all channels – from our own cafes to B2B and B2C platform.” Chitharanjan said.
Verlinvest, which also has investments in Indonesian coffee chain Kopi Kenangan, is backed by the family that controls the beer giant AB InBev.
In India, it has invested in companies including sauces and condiments maker Veeba, edtech firm BYJU’s, online cosmetics retailer Purplle, fertility chain Ferty9, home furniture maker Wakefit, etc.
Coffee brands such as Blue Tokai have been benefitting from a rise in coffee culture in India. Factors such as global coffee trends, the influence of social media, the rise of artisanal cafes, and a shift towards personalized and unique coffee experiences are also fueling the demand for specialty coffee brands in India.
Other instances of coffee companies raising funds from investors include speciality coffee and cocoa startup Subko Coffee Roasters‘ $10 million funding led by entrepreneur and investor Nikhil Kamath. Earlier this week, GRM Overseas, India’s third-largest rice exporter, bought a 44% stake in the parent of instant coffee maker Rage Coffee, whose investors include Sixth Sense Ventures, and prominent figures such as cricketer Virat Kohli.
Last year, Third Wave Coffee raised $35 million in a Series C funding round led by India’s homegrown private equity firm Creaegis. The round also saw Whale Ventures joining as a new investor. Existing investors including Grand Anicut Fund, 8i Ventures and leading family offices also participated in the financing.
Consequently, Tata Starbucks, a joint venture between Starbucks and Tata Consumer Products, has unvielved plans to operate 1,000 cafes in India and double its workforce by 2028, amid fierce competition from local chains.
Earlier this year, 12 Flags Group, a consumer business-focussed fund floated by Reckitt Benckiser’s former global chief executive officer Rakesh Kapoor, invested an undislcosed amount in Blue Tokai.
