Chaayos: Brewing Success
The distinction between a deft entrepreneur and a novice is the dexterity to perceive a potent disruptor in the market and having the competence to translate the intent feasibly into a workable business model. For Nitin Saluja, the prime instigation to launch a chain of dedicated “chai” (tea) selling outlets was to challenge the sheer dominance of multinational coffee chains like Starbucks and Café Coffee Day in the non-alcoholic beverage market, even though tea outsold coffee by a 30:1 volume margin. A subtle observation of the immense expansion the business could offer infused with his fondness for “chai” prompted Nitin to bid adieu his high paying IT job in the US in the favor of his second entrepreneurial venture. The chief intention was to offer the customers a diverse choice of customizations and add-ons and providing them with a proper ambiance that would be a reminiscence of the customer’s own beloved ‘chai addas’ at their workplaces, college canteens or colony vendors.
A graduate of 2007 batch from IIT Bombay in the mechanical stream, Nitin had also co-founded an educational robotics company ThinkLabs that incubated at SINE IIT Bombay. The motive was to inculcate a fascination in youths towards robotics through requisites like kits, workshops and web-based learning resources. The company, that is currently valued at over $10 million dollars, is an active provider of scientific and technical education to students. After graduating, Nitin was inducted as a senior consultant at Opera Solutions for roughly five years, where he assisted multiple fortune-500 companies to optimize their supply chain and improve reliability. Conceptualizing the idea for ‘Chaayos’ with his wife, he was soon joined by his colleague Mr. Raghav Verma, a 2010 IIT Delhi graduate, as a co-founder.
The duo discovered that the predominant consumption of the beverage was through small vendors and with no major outlet servicing personalized tea, there was always a compromise with either hygiene or discretion. Expanding on similar lines with seed money of 2.5 million rupees, the company attracted investments in excess of $5 million from Tiger Global Management in the first round itself. In October 2017, the same firm funded an additional $2 million facilitating more outlets and expansion beyond Delhi NCR and Mumbai. Around two years later, Chaayos attracted further investments from ‘Saif Partners’ and several South-East Asia firms for over $12 million. On the revenue side, the company generated a handsome 520 million rupees in the financial year 2018 with an impressive customer repeat rate of over 42% and a 55% reduction in its losses.
Inquisitive of experimenting with tea from his childhood, Nitin also manages the R&D of the company producing exotic variants like ‘Hari mirch’ and ‘milk adrak’ that Chaayos is prominent for while Raghav contributes to managerial responsibilities. Perceptive to the contribution of technology to efficiency and optimization, the company has developed all its systems in-house and uses app-based stations to better the customer services, minimize wastage and maximize efficiency. Nevertheless, plenty of attention is also paid towards maintaining consistency among the various outlets to deliver the same standard yet the quirky décor for each of them is kept disparate to provide a novel immersion into the nostalgic gratification of savoring “chai and snacks” once again.
Boasting of operating in over 65 stores, as of November 2019, the startup also bagged the Lufthansa’s ‘Runway to Success’ contest, the airline serving its iconic Masala Tea on every flight that departs from India. The company did, however, hit a few bumps in the road as the recent substitution of its OTP method by deploying a facial recognition feature raised privacy and ethical concerns. Nevertheless, with a continual inflow of positive customer reviews and a spirit to stay in tune with the market and customer trends, Chaayos’ vision to increase its store count five folds over the next half-decade seems highly promising.
Smart marketing, strong funding, fresh concept, and dedicated founders constitute the crux of any successful venture. With all these factors falling for Chaayos in the right spot, the future certainly appears optimistic. It requires a genuine entrepreneurial spirit to take up the most commonplace idea and morph it into a 100 million rupee plus business model. Mr. Nitin’s successful stint at establishing such a company certainly serves as an inspiration to hundreds of students graduating from IITB each year and we wish him great fortune ahead.