Mumbai: Tea cafe chain Chaayos, backed by investors including Tiger Global and Elevation Capital, has appointed Avendus as an advisor to raise $50-70 million in a fresh funding round, two people familiar with the matter told Mint.
“The company mandated Avendus a few months ago and the deal has been formally launched. While the exact structures are yet to be decided, several private equity and growth stage funds have been tapped as part of the process,” said one of the people cited above, adding that the company plans to use the funds for expansion.
The round is expected to be a mix of primary and secondary. “There is likely to be a $20 million secondary component, with Tiger Global looking to exit its stake in the company,” the second person cited above said on the condition of anonymity.
Tiger Global did not respond to Mint‘s request for a comment till the time of publishing. Chaayos also did not respond to requests sent on 20 April, while Avendus declined to comment.
The development comes nearly four years after the company raised $53 million in its Series C funding led by Alpha Wave Ventures. The chain was valued at about $250 million following its round in 2022, according to Tracxn data.
Operated by the parent entity Sunshine Teahouse Pvt Ltd and backed by investors including Elevation Capital, Tiger Global and Think Investments, Chaayos has deployed capital to expand its store network, make technological advancements and widen its offerings.
In 2024, Mint had reported that the company aimed to premiumize its offerings and had conducted trials at select cafes by adding new items to the menu and improving its food and beverage presentation.
The company, which serves a variety of tea, snacks and other beverages, gets about 35-40% of its revenue through aggregators such as Swiggy and Zomato.
Founded in 2012 by Nitin Saluja and Raghav Verma, Chaayos has about 200 cafes in seven Indian cities including Mumbai, Chennai, Bengaluru and Chandigarh. With the metros covered, the company now looks to expand to tier-II cities, especially to cooler hilly regions that see a tourist influx and a robust demand for chai.
Food consumption is also an important segment for Chaayos, bringing in nearly half of its revenue. Food offerings include fusion tacos, alongside samosas, vada pav and pakodas.
In FY25, the company reported an operating revenue of ₹310.6 crore, up from ₹248.6 crore a year earlier. Its losses narrowed to ₹25.4 crore from a loss of ₹54 crore in FY24, according to a report by Entrackr.
Chaayos primarily competes with organized tea café chains, with being its closest and largest rival, followed by others including Chai Sutta Bar, MBA Chaiwala, Chai Kings, Chai Thela, and premium tea brands like Vahdam Teas, as per online reports. It also faces indirect competition from coffee chains Starbucks, Blue Tokai and Third Wave Coffee.
Broadly, India’s food services market, valued at $80 billion in 2024, is set to grow at a compounded average growth rate of 10-11% through 2030, with the organized sector driving this expansion, according to a report by Redseer.
As consumer preferences evolve, the rise of and organized dine-in establishments is also reshaping the landscape, the consultancy firm noted.