India’s Vahdam Teas, known for disrupting the global supply chain for tea, has raised US$2.5 million in a Series B funding round for its direct-to-consumer business. Fireside Ventures, India’s leading consumer investment fund, is the lead on this round. The funding will be used in the U.S. market to invest in customer acquisition and brand building, and to uncover new territories.
Under the direction of its 27-year-old founder and fourth generation tea entrepreneur Bala Sarda, Vahdam Teas has grown by 1,000 percent in the last two years. Sarda took back the company’s ownership of its teas in 2015 to bring to fruition his vision of building a global premium tea brand from India.
He has done this by making garden fresh teas available to consumers across the world in the shortest periods of time by leveraging technology and cutting out all unnecessary middlemen. All of the company’s teas are procured directly from plantations and tea growers within days of production, and then packaged and shipped directly from its India-based source. Seventy percent of the company’s revenue – infused by the recent opening of a U.S. warehouse in Indiana and a N.Y. office – comes from the U.S. market.
Sarda said, “We are excited to take the next steps in the growth journey at Vahdam Teas. Fireside Ventures has been one our earliest supporters and we are glad to have them back with us in this round as well. We have seen tremendous customer appreciation for our teas and plan to keep building the momentum. With stronger investment in the brand and our infrastructure, we plan to keep building to achieve our vision of making the freshest teas to consumers worldwide, under a home-grown brand, which is socially conscious.”
Fireside Ventures, which is a focused early-stage investment platform for consumer brands, is anchored by several marquee investors, including Unilever Ventures, Premji Invest, Westbridge Capital, Mariwala Family Office, Emami Ltd., RP-Sanjiv Goenka Family Office, Sunil Munjal’s Hero Enterprise Investment Office, and ITC Ltd. Established in 2017, Fireside manages a corpus of Rs 3.4 billion cr to be invested in consumer brand startups, from Seed to Series A funding.
All Tea’d Up
Tea is the second most consumed drink in the world after water. Between 2009 and 2016 the global tea market has seen a compounded annual growth rate (CAGR) of 5.6 percent, according to the report Tea Market: Global Industry Trends, Share, Size, Growth, Opportunity, and Forecast 2017-2022, issued by IMARC Group. This growth has pushed output to reach 5.6 million tons last year, and has generated expectations that production will top 7.2 million tons by 2022.
India is second only to China as the top tea-producing nation in the world, according to the UN Food and Agriculture Organization. And Vahdam plans to capture a majority share of the estimated US$44.3 billion marketplace through its expertise of being the world’s first truly vertically integrated tea brand.
-Michelle Pelletier Marshall
Michelle Pelletier Marshall is the managing editor for Global AgInvesting’s quarterly GAI Gazette magazine and a regular contributor to GAI News. She can be reached at mmarshall@globalaginvesting.com.