India start-up targets tea change

"They would see me spending 18-20 hours a day in front of my laptop, and it was confusing to them," he says. "It took them time to understand what I was doing. Once we started gaining traction they were very supportive. They know who's who in the industry."

The Teabox model is based on disrupting established order. While almost every other Indian B2C start-up sells goods to local consumers, Teabox's brings local goods to overseas consumers. And within the tea industry itself, the company is removing a string of intermediaries from the supply chain and reducing delivery times from months to days.

It was enough to convince Accel Partners and Singapore-based Horizen Ventures to put up $1 million in Series A funding.

Tea is a $40 billion industry globally and India is the second-largest producer. However, Kaushal found that infrastructure had not kept up with quality requirements: certain premium teas are known for their freshness and aroma, but it was taking 3-6 months to get them from plantation to consumer.

Teabox, which started out in 2012 as portal called Darjeeling Tea Express, sources tea from the plantations, has it vacuum-packed within 48 hours and ships to customers less than 24 hours after that. It claims to be the number one online tea supplier in its current target markets of Russia, Australia, Canada and the US, having so far relied on word-of-mouth marketing alone.

Dugar stresses that repeat business is the result of rigorous quality control, with a dedicated team of tea tasters assessing changes in the output from different plantations. The company employs approximately 24 people: 14 at a fulfillment center in the Darjeeling tea-growing region and a 10 people covering technology, marketing and customer services in Bangalore.

There are 500-600 tea plantations in India, of which about 200 are considered top tier. Teabox sources from 75 of these and plans to increase its coverage to 120-130 plantations by the middle of this year. The company has shipped 10,000 kilograms of tea since inception and the average order is $105.

"We had decent revenues and were gaining traction but decided that to really scale up the business we would need some experience, connections and knowhow as well as capital," says Dugar, explaining what led to Accel and Horizen coming on board.

The capital will be used to scale-up back-end infrastructure - including two additional fulfillment centers - and marketing. Japan is the next target market, followed by China.

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• Topics
• South Asia
• Consumer
• Early-stage
• Accel Partners
• India
• Consumer
• Venture