Is Tea Industry the Next Sector for SMEs to Venture Into ?

Tea, being the favourite hot beverage of the Indian natives, comes in rich flavours; in a bid to arouse consumers’ taste and offer spices enriched teas, various small, as well as big tea brands, entering the Indian tea industry. 
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Jan 23,2020
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  • 17 Mins Read

At present, India is the second-largest tea producer across the globe. According to IBEF, “the Indian domestic market consumed 973 million kg of tea during 2016-17. The country is ranked fourth in terms of tea exports, which reached 256.57 million kg during 2017-18 and were valued at US$ 785.92 million.”

The report also states that the country has around 566.66 thousand hectares of area under tea production, as per figures for December 2015. Tea production is led by various states--Assam (307.08 thousand hectares), West Bengal (140.44 thousand hectares), Tamil Nadu (69.62 thousand hectares) and Kerala (35.01 thousand hectares). According to estimates, the tea industry is the country's second-largest employer. It employs over 3.5 million people across some 1,686 estates and 157,504 smallholdings and most of them are women.

Owing to consumers’ increasing preferences for tea, several tea brands have ventured into the Indian market. Recently, the Goa-based premium tea brand, Tea Trunk, which prepares wellness teas for health-conscious customers, has lately secured $220,000 in an angel round of funding. A cohort of angel investors and Rebalance community-led funding round of the startup.

The company plans to employ the investment sum to enhance its array of products and release new products in the market.

“We plan to use the funds to expand our product line of health-focused teas, launch more innovative products, and to strengthen our positioning in the wellness space - as a functional beverage for daily consumption,” Snigdha Manchanda, Founder at Tea Trunk, said in the company’s official statement.

“We plan to use the funds to expand our product line of health-focused teas, launch more innovative products, and to strengthen our positioning in the wellness space - as a functional beverage for daily consumption,” Manchanda added. 

Other angel investors, who partaken in the funding round, incorporate Anshul Agarwal, Co-head of Consumer, FIG and Business Services at Avendus Capital, Anand Sinha, Global Head at Zomato Gold, and Mandar Vaidya, CEO at OYO for South-East Asia; the Middle-East, Rohit Shankar, Co-founder at DimDim, Sorabh Agarwal, Former MD — Copal Amba, Puneet Chandra, CEO at Skootr, and Vaibhav Suri, Co-head of Product and Strategy at Delhivery.

“Snigdha has relentlessly built a profitable company in a challenging consumer brand space. She did this while focusing on a superior product and building a robust team. We are happy we could help Snigdha navigate through fundraising and actively participate in shaping her company for future growth." Vikas Kumar and Aishwarya Malhi, Co-founders at Rebalance, in the company’s official statement. 

“I am super excited to be partnering with Snigdha and TeaTrunk. What she and the team have built is inspirational and they are only getting started,” Anand Sinha, Global Head at Zomato Gold, added.

The Goa-based company asserts to have its presence in 15 nations. Further, its customer base grows at 150 per cent year-on-year. 

In the previous year, Manchanda-led, Tea Trunk partaken in Rebalance accelerator’s inaugural cohort.

Small Tea Brands Outshining in the Indian Tea Industry 

Tea, being the favourite hot beverage of the Indian natives, comes in rich flavours today. In a bid to arouse consumers’ taste and offer spices-enriched teas, various small as well as big tea brands, are entering the Indian tea industry. 

In 2019, the Delhi-based tea company, Vahdam Teas secured INR 75 crore in Series C funding round. Sixth Sense Ventures, which is a consumer-centric fund, led a funding round of the startup.  

Further, the startup received funding from a cohort of highly affluent family offices and high net individuals (HNIs) incorporating Pankaj Chaddah, Co-founder at Zomato, Kris Gopalkrishnan, Founder at Infosys, SAR Group Family office, Mankind Group Family office, and Urmin Group Family office, among others, have also infused money in the company, The Economic Times reported. 

Another tea company, Teabox raised funding in the last year. The premium tea brand has raised undisclosed money in fresh funding round. The Dubai-headquartered company, NB Ventures led the funding round of Teabox. According to the media reports, the company garnered nearly $5 million in the funding round. 

Teabox raised the above-cited funding round following its Series B equity round, wherein it secured $7 million, in December 2017. According to The Economic Times’ report, the tea brand said that existing investors had also participated in the latest round. Teabox counts marquee venture capital firm Accel Partners, RB Investments and Ratan Tata among its list of backers.

Bengaluru-based tea brand, Teamonk Global also raised $1 million in pre-Series A funding round. Former McKinsey Chief Rajat Gupta and Roots Ventures led the funding round. The company utilized the fresh capital to increase its portfolio of premium teas and aims to expand further.

“We are pleased to invest in Teamonk since it is an emerging leader in the curated speciality teas space. We see India is an ‘under beverage’ country – with not many beverage brands and choices. However, with promoters like Ashok and Amit and their years of experience across conglomerates in India and overseas, an interesting ecosystem has been built at Teamonk” TechStory reported quoting Japan Vyas, Founder at Roots Ventures, statement. 


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