Indian startup Chaayos bets on $10 billion chai market in country

Driven by huge customer response, leading chai Cafe chain Chaayos is in advanced talks with venture capital funds to raise about Rs 40 crore and add 50 outlets to its network.

“Huge potential exists in India in chai space which is worth over $10 billion and is completely unorganised. There is great investor traction because of the huge market size and opportunity to create a multi billion-dollar enterprise in this space.

“We plan to open 50 more cafes  20 in the national capital region and another 30 in Pune, Bangalore, and Mumbai in the next 18 months,” said Nitin Saluja, founder of Chaayos. Chaayos is in advance talks with venture capital funds and is hoping to close the deal soon.

Chaayos, founded by two IITians, Nitin Saluja and Raghav Verma, is running eight cafes in Delhi, Noida and Gurgaon.

“We are getting an amazing response from consumers. Capital would be deployed in opening more cafes, investing in technology to expand our on-demand chai network and ramping up our chaipattis segment,” he said.

The company lately experimented with Chai-on-demand, a chai delivery service which is a hit with customers. To provide chai at customer’s door-step, Chaayos has partnered with Ola Cafe, a new service by Ola Cabs, and delivery partner Grofers.

In less than a month after launch, the company is fulfilling over 500 on-demand orders a day. Chaayos has recently launched its mobile app to place food & chai-on-demand orders.

Talking about the merchandising of its products, Saluja said that they are selling over 2,000 boxes a month of blended chaipatti such as tulsi, adrak and masala chai.

On managing relationship with the customer Saluja said, “Chaayos gives custom offers via sms to each customer, which sees really good redemption. We engage very strongly with our customers via social media - Facebook and Twitter. It empowers us to hear direct voice of the consumer,” he added.