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Cafe chain Chaayos names Ajay Kaul as chief advisor amid plans for big expansion



Chaayos, which serves customized tea and snacks, looks to add 25 new stores over the next 9 months and plans to take this number to 325 over the next 5 years

Chaayos has named Ajay Kaul, a former chief executive of Jubiliant Foodworks, as chief adviser as the cafe chain looks to step up expansion process in existing and newer cities.

Chaayos, which serves customized tea and snacks, looks to add 25 new stores over the next nine months and plans to take this number to 325 over the next five years, said Nitin Saluja, co-founder and chief executive of Chaayos.

Chaayos, run by Sunshine Teahouse Pvt. Ltd, currently operates 50 cafes across Delhi NCR, Mumbai and Chandigarh.

“Ajay is credited with the fast scale up of Dominos in India and understands the food space like no one else in the industry,” said Saluja. “We shall deeply benefit from his experience in readying the organization for a massive scale up.”

Chaayos looks to expand its presence to eight cities including Pune, Bangalore, Hyderabad, Chennai and Kolkata over the next five years.

“Chaayos has established itself as the most promising fast casual chai (tea) chain in a short span of five years. This is reflected in their high customer repeat rates…and strong same-store growth rates,” said Kaul.

According to Kaul, while India is predominately a tea drinking nation, we lack good chai cafes and Chaayos is trying to address this market. “Coffee is a social consumption drink. We (Indians) do not drink coffee out of habit, it is tea that is consumed largely.”

“To every 30 cups of tea, one cup of coffee us consumed,” added Saluja

After stepping down from Jubiliant Foodworks, Kaul has been associated with ZZZZ and also invests in start-ups as an angel investor. His investments include logistics firm FarEye and Faballey, among others.

Kaul believes it is a great time to be in the food and beverages industry as the customer discretionary spending continuous to go up. He does not rule out picking stake in Chaayos. “Investment will happen at the appropriate moment,” he added.

Chaayos, which moved to a partner-based expansion model after struggling to raise funds in 2016, is now eyeing profitability in the next 10-12 months.

A partner-based model is largely where the company shares profits with a third party in return of incurring the cost of setting up a store. However, these stores are run by staff appointed by Chaayos and quality of food and beverages is also controlled by the company.

The company sees a customer repeat rate of 3.7 times a month and currently has about 750,000 registered customers.

Nearly 85% of customers walking into its stores or ordering tea online are registered customers.

Founded in November 2012 by Indian Institute of Technology (IIT) Bombay alumnus Saluja and IIT Delhi graduate Raghav Verma, Chaayos raised $5 million from consumer Internet-focused venture capital firm Tiger Global in May 2015. It also counts Ola’s Bhavish Aggarwal, Ankit Bhati and Toppr’s Zishaan Hayath as angel investors.

The company currently sells 16,000 cups in a month.

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