Chai Point to invest up to Rs 120 mn, add 30 stores in FY19

Expects to break-even in the ongoing financial year

Brewing a strong expansion plan, India’s largest chain of organised tea stores, Chai Point, is looking to open around 30 new stores by the end of this financial year with an investment of Rs 100-120 million. The start-up on Friday hit a century with the opening of its 100th store in Bengaluru.

The company, which has a revenue of over Rs one billion, expects to grow at 75 per cent growth rate and break even by the end of this financial year.

However, the company has no plans to foray into newer geographies apart from the current cities it is already present in, including Delhi-NCR, Mumbai, Bengaluru, Pune, Hyderabad, Gurgaon. “Our biggest priority right now is customer experience,” said Amuleek Singh Bijral, co-founder and chief executive officer, Chai Point.

The Bengaluru-based startup in April this year had aised $20 million in fresh funding led by Paragon Partners, a mid-segment private equity investor, while existing investors, including Eight Roads (Fidelity’s India PE arm), Saama Capital and DSG had also participated in the round. The funding came at a time when rival Tata Global Beverages is also ramping up its presence in the space with its very own Cha cafes.  

The company is also growing strong in the automated hot beverage dispensing machines segment, with its flagship product boxC looking to take the number of its clients from 500 to 850 by the end of the current financial year.

With the opening of its 100th store, the company also announced the rolling out of facial recognition bills for frequent customers. With the new technology, customers can opt for a face scan to make their billing experience quick and seamless and get higher rewards and benefits.

As the average per capita consumption of the beverage is increasing at 20-30 per cent, Chai Point looks to expand its business five times in the next three years. It had earlier raised $10 million in Series B funding in 2015.