Paragon leads $20m round for India's Chai Point
Paragon Partners has led a $20 million Series C funding round for India-based Chai Point, a chai tea store operator that claims to be the country’s largest brand in its category.
Additional participation came from Eight Roads Ventures, Saama Capital and DSG Partners. The capital will be used to strengthen multi-channel marketing efforts, expand a tea sourcing program known as “garden to glass” and improve an automated beverage dispensing business called BoxC.
“Chai is integral to the rhythm of life in India,” Tarun Khanna, co-founder of Chai Point, in a statement. “At Chai Point, we are using technology to enhance the customer experience, and are recommitting to a strengthening of our efforts towards environmental sustainability.”
Founded in 2010, Chai Point positions itself as the leader of India’s INR1.5 trillion ($22.7 billion) chai market, where per capital consumption is said to be increasing at 20-30% per annum. It currently sells about 300,000 cups of chai a day and is targeting a fivefold increase in sales volumes across the next three years.
The company has already deployed almost 2,000 fresh milk dispensers as part of its BoxC distribution strategy. It also operates a proprietary cloud-based platform called Shark and is planning to open its 100th physical store in May.
Competitors include Teabox, an online delivery service for fresh Indian tea that closed a $7 million Series B round led by RB Investments late last year. Teabox describes itself as the only global tea brand with an intensive digital presence and a unique disruptor in an industry which has seen little modernization in 200 years.
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