Indonesia coffee shop start-up achieves unicorn status

Kopi said the round established it as the first new-retail food and beverage (F&B) unicorn to emerge from Southeast Asia. The company claims to be Indonesia’s fastest-growing player in this space with the most downloaded coffee app locally.

Support for the Series C came from existing investors Horizons Ventures, B Capital Group, and Kunlun, a Singapore-based family office. Falcon Edge Capital – which recently rebranded as Alpha Wave Global – came in as a new investor.

It follows a USD 109m Series B in May 2020 led by Sequoia Capital India that also featured the likes of Alpha JWC Ventures, Verlinvest, and Sofina. That round saw Eduardo Saverin, a co-founder of B Capital and Facebook, join the Kopi board.

Kopi Kenangan was founded in 2017 to target a gap between high-priced international coffee chains and the instant coffee sold in local street stalls. Customers ordering via the app can either have coffee delivered to their doorstep or pick it up at one of some 600 stores across 45 cities. At the time of the Series B, Kopi had about 300 locations and was growing at a rate of one store a day.

This model and expansion story invites comparison with Luckin Coffee, which rose from nothing to become China’s second-largest coffee shop chain within the space of 18 months before filing for bankruptcy last year amid a massive sales fraud scandal. However, unlike Luckin, Kopi claims to be consistently profitable with “robust” store-level margins and an attractive store-level payback period.

Recent traction has been partially attributed to pandemic-related initiatives such as the adoption of contactless booking, which is said to have increased revenue and the user base. In the past 12 months, Kopi claims to have doubled sales and served 40m cups of coffee. The company, which sold 30m cups in 2020, is planning to hit 5.5m cups a month in the first quarter of 2022.

The fresh capital will be applied to an international expansion and a push into adjacent F&B product offerings. Kopi says it is experiencing strong domestic demand for recently launched brands including Cerita Roti (bread), Chigo (chicken), and Kenangan Manis (cookies).

Total funding to date comes to at least USD 240m, with Alpha JWC having led an USD 8m seed round in 2018 and Sequoia India backing a USD 20m Series A in 2019. Previous backers also include Arrive and Serena Ventures, the VC businesses of Jay-Z and Serena Williams, respectively, as well as Jonathan Neman, CEO of US health-food restaurant chain Sweetgreen.

“We are extremely excited about the potential of Kopi Kenangan as it continues to tap into the rapidly growing F&B market in Southeast Asia,” Bosun Hau, a managing director at Tybourne, said in a statement.

“The strength of the Kopi Kenangan team, coupled with their entrepreneurial spirit, deep knowledge of the F&B industry and their ability to use technology to retain and engage with customers and improve efficiency and sales, bodes well for the future of this new Indonesian unicorn.”

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• Topics
• Southeast Asia
• Consumer
• Expansion
• Indonesia
• Horizons Ventures
• B Capital
• Falcon Edge Capital
• Food
• TMT