Craft coffee and bakery chain Blue Tokai has closed a $35M Series C funding round led by Verlinvest, a fully integrated investment platform. Other participants include Anicut Capital and A91 Partners, which have all invested in the growth expectations of Blue Tokai and its ability to scale out its commercial footprint against a backdrop of aggressive food and beverage competitors.
PC: Medial
This new round of funds will further drive Blue Tokai’s expansion plans to increase its presence in the existing metro markets and expand into new Tier-I and Tier-II cities across the nation over the next three years, the company said in an official release. Harnessing the strong background instilled by its co-founders, Matt Chitharanjan, Namrata Asthana, and Shivam Shahi, Blue Tokai has grown deep roots in partnerships with retail outlets, luxury hotels, restaurants, corporates, and coworking spaces.
The remarkable growth trajectory of Blue Tokai is underpinned by parameters of expansion, doubling in size to shops now totaling an experience of 130 outlets in the last 12 months. Further catalyzing these expansion plans with the new funds infusion, it aims to scale up to more than 350 locations in the next 30-36 months, thus cementing its presence and accessibility to a wider consumer base across diversified geographies.
In its financials, Blue Tokai reported an extraordinary increase in revenue by operation. Revenue grew 72% in FY23 to Rs 127.45 crore from Rs 74 crore in FY22. In tandem, the company will once again widen its losses to Rs 43 crore in FY23 from Rs 12.3 crore in the last financial year, according to insights from startup data intelligence platform TheKredible. With the filing for the annual report for FY24 pending, it is about time the company strategically utilizes the latest funding infusion to drive operational efficiency and sustainable growth in the evolving market dynamics.
Competition: The biggest competitors to Blue Tokai are Rage Coffee, Third Wave Coffee Roasters, Slay Coffee, Sleepy Owl, and Seven Beans Co. in the specialty coffee category. Incidentally, Third Wave Coffee turned out to be the biggest revenue-generating brand for venture-funded startups in FY23. However, the company had to go through some organizational changes; it laid off more than 100 employees after a $35 million fundraise in September last year. That finally led to a change in the leadership when Rajat Luthra took over from Sushant Goel of KFC as the CEO.
In a related development, GRM Overseas has taken a 44% equity stake in Rage Coffee through a strategic combination of primary infusion and secondary buyout, an indication that investments and strategic partnerships would continue to pour into the rapidly growing segment of coffee and bakery. Consequently, with this investment by Verlinvest and some key investors, Blue Tokai is uniquely positioned to capture market opportunities, become an innovator, and consolidate its leading position across diverse consumer segments in a manner that would ensure sustained growth and industry leadership within an evolving F&B landscape.
