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Tea Trails raises US$1 million for expansion

Tea Trails, the chain of tea cafes in Mumbai has confirmed raising US$ one million in their first round of funding. These investments are by a group of HNIs led by Anil Matai, former CEO of Pharmaceuticals of Novartis India, Vikram Tandon, regional head, Middle East at Back Office Associates and Shyam Sundar R, partner, CPM consulting. The two-year old cafe chain plans to use the funds for its growth and expansion in focus markets with an aim to increasing its network with over 250 outlets by the year 2018. Major part of this network expansion will be through franchisee outlets which is an asset light business model.

Promoted by a group of entrepreneurs with successful track records, Tea Trails has embarked on an interesting journey in the cafe industry since November 2013. Tea Trails currently operates eight outlets in Mumbai and have embarked on a pan India expansion strategy that is a combination of 20 per cent company owned and 80 per cent franchised outlets. In the current year, the brand plans to open 45 outlets across the country as they are negotiating master franchise contracts in different markets like Maharashtra, Pune, Bengaluru, Hyderabad, Vishakhapatnam, NCR and Ahmedabad.

Uday Mathur, co-founder, Tea Trails India said, “The large part of the expansion strategy is based on Franchise network development. This business model is asset light with high ROI. Our company is targeting malls, commercial spaces and high streets to open outlets. We are also looking at smaller kiosk formats to be opened in food courts.”

Tea Trails also proposes to merchandise select blends of their teas that would be available at premium retail stores and niche online portals across India, besides retailing them at the existing Tea Trails outlets. The cafe chain currently offers about 80 varieties of teas from around the world in its outlets

Mathur added, “India is the second largest tea consuming market in the world but the Tea Cafe market is practically non- existent. Tea Trails aspires to cater to this latent demand and be the category creator. Tea Trails operates in this space and has a first mover advantage.”

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