SUMMARY
- Verlinvest has led a $35 million investment in Blue Tokai Coffee, with participation from Anicut Capital and A91 Partners.
- The funding will be used to expand Blue Tokai’s footprint to over 350 outlets in India over the next 30-36 months, targeting metro and Tier I & II cities.
- Blue Tokai’s revenue surged by 72% in FY23, but losses widened 3.5 times, reflecting the challenges and opportunities in the specialty coffee market.
Global investment firm Verlinvest has made a strategic investment of $35 million in Blue Tokai, a specialty coffee and bakery brand, as part of its Series C funding round. The investment also saw participation from existing backers Anicut Capital and A91 Partners. The fresh infusion of funds is expected to bolster Blue Tokai’s expansion plans across metro markets and new Tier I and Tier II cities in India over the next three years.
This funding comes on the heels of Blue Tokai’s earlier Series B round in January 2023, where it raised $30 million, led by A91 Partners. Co-founded by Matt Chitharanjan, Namrata Asthana, and Shivam Shahi, Blue Tokai has established partnerships with numerous retail outlets, luxury hotels, restaurants, corporates, and co-working spaces. Over the past 12 months, the company has expanded its store count to 130 outlets and plans to increase this to over 350 locations within the next 30 to 36 months, leveraging the newly raised capital.
Blue Tokai reported a 72% increase in revenue from operations, reaching Rs 127.45 crore in FY23, up from Rs 74 crore in FY22. However, the company’s losses also widened nearly 3.5 times to Rs 43 crore in FY23 from Rs 12.3 crore in FY22, as per data from startup intelligence platform TheKredible. The company’s annual report for FY24 is yet to be filed.
Blue Tokai operates in a competitive market with rivals such as Rage Coffee, Third Wave Coffee Roasters, Slay Coffee, Sleepy Owl, and Seven Beans Co. Notably, Third Wave Coffee, which emerged as the largest venture-funded coffee brand by revenue in FY23, experienced significant layoffs shortly after raising $35 million in September last year and saw a leadership change in March with CEO Sushant Goel replaced by Rajat Luthra from KFC.
Additionally, GRM Overseas recently acquired a 44% equity stake in Rage Coffee through a mix of primary infusion and secondary buyouts, further intensifying competition in the specialty coffee segment.
