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Chai Kings eyes USD 0.5 million funding for expansion
The two-year-old teashop chain Chai Kings is on rapid expansion mode and plans 11 new outlets in the next six months.
Jahabar Sadique, the co-founder of the brand tells us, “As of now, we have seven outlets, we plan on setting up 11 more outlets by December, for which work will begin in July. My business partner Balaji Sadagopan and I had started the first outlet in October 2016, with. We were IT professionals for 10 years and had decided to enter business with franchise outlets of Green Trends and Subway. We simultaneously ran a medical transcription services firm and an IT marketing company.”
The duo was interested in the hospitality space and wondered why there was no tea shop alternative to Madras Coffee House. There are close to 15,000 tea stalls in Chennai, and most of them happen to be in the unorganised segment. And that’s where it saw an untapped opportunity for Chai Kings.
The company was set up with an initial investment of Rs 1.25 cr and the outlets sell between 1,200 to 1,500 cups of tea every day, depending on the location.
He says, “We had decided early on that we would need to bring in a few HNI’s and PE funding if we wanted to take our business to the next level. The company is trying to raise a funding of $5,00,000 from a group of HNIs.”
This will be dedicated towards the expansion process and the deal is on the verge of being finalised. “We hope to touch the magic figure of 100 stores by 2021. We had recently tied up with the snack maker Gulabs, which supplies khakhras to all our outlets in Chennai. Our 500 ml tetra pack tea flasks have also become a hit with the office crowd which gets delivered via Swiggy.”The company’s ginger tea is the top seller, alongside variants like Sulaimani and masala tea.
The team is also in the middle of associating with a group of heritage bakeries in the city to close the loop on the snacks that are being served in the outlets.
“There was a reason we opted for the small format outlets for Chai Kings. We did not want to be a ‘me too’ player in an industry, where we already have majors like Café Coffee Day that are running lounge format outlets,” he says.
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