Tea producer and café owner Vahdam Teas Pvt Ltd has raised ₹25 crore ($3 million) from Sidbi Venture Capital Ltd to shore up its cash reserves and boost global expansion.
The company is focusing on product innovation and manufacturing expansion, founder and chief executive Bala Sarda told Mint. The company, however, has no immediate plans to grow its café business beyond a single outlet in New Delhi.
“We will continue to scale our teas and infusions, botanicals and herbal supplements in core markets,” Sarda said. “Over the past two years, the company has focussed on identifying key levers for scale. With a sharper focus and a more resilient foundation, we are well-positioned for sustained growth over the next three years.”
Growth strategy
The investment will support Vahdam’s efforts to scale operations and strengthen its supply chain, said Arup Kumar, managing director of SIDBI Ventures, an investment management company and a wholly owned subsidiary of Sidbi—a financial institution for the MSME sector.
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Vahdam, which sources most of its products from India but generates nearly all its revenue abroad, expects to close FY25 with over ₹265 crore in net revenue and turn operationally profitable. It conducts its international business through its subsidiary Vahdam Teas Global Inc.
The company’s key markets include the US, Canada, Europe, and the UK, where it sells online and through retailers like Walmart and Costco. “We’re now in about 2,000 Walmart stores across the US market,” Sarda said.
Vahdam competes with peers like Newby Teas and, among retail chains, with chains such as TeaBox, Brewhouse Tea, Dorje Teas, Chai Point and Chaayos. The direct-to-consumer brand buys teas, spices, and other superfoods from farms and estates in India.
At a consolidated level, the company reported a revenue from operations of ₹225.2 crore in FY24, growing 10% over the previous year’s ₹203.6 crore, according to its latest annual filings with the ministry of corporate affairs, accessed via business intelligence platform Tofler. The company’s net loss narrowed to ₹17.6 crore in FY24 from ₹55 crore the year before. This was largely due to lower spends on inventory, finished goods and stock.
As of FY24, Sarda owned a majority of the business (in excess of 63%) and the rest was held by investors like Sixth Sense India, IIFL India and others. Sarda said the company had raised ₹200 crore till date across its various fundraises. It also counts Fireside Ventures; family offices of the owners of Mankind Pharma, SAR Group, and Urmin Group; Abhishek Bachchan and Sachin Tendulkar, among others, as investors.
The global tea market, valued at about $80.9 billion in 2024, is expected to grow to $134.96 billion by 2032, driven by a 6.6% compound annual growth rate, according to Statista. China remains the top tea producer, yielding 3.3 million metric tonnes in 2023, while India and Kenya are also major contributors.