Sequoia leads $109m round for Indonesia coffee chain

B Capital, Horizons Ventures, Alpha JWC Ventures, Verlinvest, Sofina, and Kunlun, a Singapore-based family office, also participated. Eduardo Saverin, a co-founder of B Capital and also a co-founder of Facebook, will join the Kopi board.

Kopi calls itself the fastest-growing non-franchise coffee chain in Southeast Asia, with a portfolio of more than 300 stores expanding at a rate of one store per day. The company, which aims to recreate international coffee chain-style branding at a locally relevant price point, wants to have 2,000 locations by the end of next year. 

The company serves about one million cups a month via an app-enabled pre-order and pick-up system launched in April. Rohit Agarwal, an investment advisor at Sequoia, said the plan was to grow the company 10x in the next nine months by adding 73 new stores. This is hoped to be achieved while maintaining a net promoter score - a gauge of loyalty - of 53%. About 85% of business is repeat customers and 45% of customers order at least once a week.

“Most Indonesians, who earn less than $15 a day on average, can’t afford $4-5 per cup of coffee, served in the global coffee chains. The alternative, instant or powder coffee served in the busy streets, though affordable, lacks the same taste and experience,” Agarwal said in a statement. “Offline stores have limited reach and models pioneered by their peers in other markets are not viable for the Indonesian market due to prohibitive logistics cost.”

Kopi aims to differentiate its products through the use of unique ingredients and local recipes. Menu items include hot and iced coffees and teas, shakes, and local snacks such as banana fritters.  There are plans to launch new products, invest in customer service-oriented technology, and growing outside of Indonesia. Agarwal said that the business is profitable with a “high gross margin [that] translates into a healthy EBITDA.”

Alpha JWC provided an $8 million seed round in 2018. This was followed by a $20 million Series A last year. Previous backers include Arrive and Serena Ventures, the VC businesses of Jay-Z and Serena Williams, respectively. NBA basketball player Caris LeVert and Jonathan Neman, CEO of US health-food restaurant chain Sweetgreen, are also investors.

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• Topics
• Southeast Asia
• Consumer
• Early-stage
• Indonesia
• Sequoia Capital
• Alpha JWC Ventures
• B Capital
• Verlinvest
• Sofina
• TMT