Trouble Brewing at Third Wave Coffee? - Indian Startup News 214
Summary
TLDRThe Indian food, beverage, and restaurant sectors are bustling with activity. Zomato is in talks to acquire Paytm's movie ticketing business, potentially integrating food sales for a dual revenue stream. Third Wave Coffee Roasters faces challenges after layoffs and financial losses, with co-founder Sujeet Kumar's heavy involvement questioned. Meanwhile, IN-SPACe launches a pre-incubation program for space startups, and Iigo's parent company debuts on the stock market with a successful IPO. Indian startups raised $176 million this week, with Umid Housing Finance leading with a $76 million Series F round.
Takeaways
- đ Zomato is in talks to acquire Paytm's movie ticketing business, which could potentially integrate food and beverage sales with movie tickets, enhancing revenue streams.
- đĄ Third Wave Coffee Roasters, despite raising $35 million in funding, has faced significant challenges, with over 70% of its stores incurring losses and the company burning through cash rapidly.
- đ€ The involvement of Sujeet Kumar, co-founder of Ola and a major investor in Third Wave Coffee Roasters, has reportedly led to operational issues and disagreements among the founders.
- đ IN-SPACe has launched a pre-incubation entrepreneurship program aimed at early-stage space startups and students interested in space technology, fostering innovation in the sector.
- đ Indian National Space promotion and authorization Center's program is a comprehensive 20-month initiative providing expert guidance to help startups and students develop their prototypes.
- đ Unacademy is reportedly in discussions with K12 Techno Services for a potential merger, which could provide Unacademy access to a large student base and educational technology platforms.
- đŒ Iigo's parent company, Le Travel Technology, made a successful debut on the stock market, with its shares receiving a significant premium over the IPO price.
- đ° Indian startups raised a total of $176 million in funding this week, slightly less than the previous week's total.
- đ UHFL (Umid Housing Finance Limited) secured the largest funding round of the week, raising $76 million in its Series F round.
- đș New Delhi-based beer brand 'BE 91' raised $25 million, indicating the growing interest in the craft beer market in India.
- đïž Bangalore-based fintech startup POP, offering cashback in the form of POP coins for UPI transactions, raised $2.4 million in its seed round, highlighting the innovation in digital payments and rewards.
Q & A
What is the current situation with Third Wave Coffee Roasters in India?
-Third Wave Coffee Roasters, despite raising $35 million in funding, has faced significant challenges. The company has laid off over 100 employees and is currently experiencing losses in more than 70% of its stores. The issues are attributed to their business and management strategies.
What role did Sujeet Kumar play in Third Wave Coffee Roasters' growth and current situation?
-Sujeet Kumar, co-founder of Zomato, became involved with Third Wave Coffee Roasters as an investor and later took on a significant operational role. He helped secure additional funding and expand the business but is also implicated in the company's rapid expansion at the expense of profitability.
Why is Zomato interested in acquiring Paytm's movie ticketing business?
-Zomato sees an opportunity to integrate movie ticket sales with food and beverage offerings, potentially increasing revenue from both ticket sales and restaurant partnerships. This strategy could capitalize on the synergies between food and movie experiences.
How does the potential acquisition of Paytm's movie ticketing business align with Zomato's existing business model?
-The acquisition would allow Zomato to offer a combined package of movie tickets and food delivery, enhancing the user experience and potentially increasing revenue from both ticket sales and food orders.
What is the significance of the pre-incubation entrepreneurship program launched by IN-SPACe for space startups?
-The program is designed to support early-stage space startups and students interested in space technology, providing a 20-month platform to develop and demonstrate prototypes with expert guidance, thereby fostering innovation in the space sector.
What was the market response to Iigo's IPO, and how does it reflect on the company's business strategy?
-Iigo's IPO was met with a 48.5% premium on its share price, indicating a positive market response. This reflects well on the company's 'boring' business strategy, which prioritizes steady growth over high-profile marketing.
How much funding did Indian startups raise in the week covered by the script?
-Indian startups raised a total of $176 million during the week, which is slightly less than the previous week's total of $192 million.
Which company had the largest funding round among those mentioned in the script?
-Umid Housing Finance had the largest funding round, raising $76 million in their Series F round.
What is the business model of the fintech startup Pop mentioned in the script?
-Pop is a fintech startup that offers cash back in the form of Pop coins for every UPI transaction made using their platform. Users can then use these coins to shop on their curated e-commerce platform, similar to the model used by Cred.
What is the collaboration between the podcast 'Backstage with Millionaires' and Google Play, and what is its focus?
-The collaboration involves a podcast episode featuring an interview with the founders of Programming Hub. The episode focuses on their journey in building a bootstrapped, profitable business with over 40 million students using their platform.
Outlines
đ Third Wave Coffee Roasters' Financial Struggles
The script discusses the unexpected downturn in Third Wave Coffee Roasters' business in India. Despite raising a significant $35 million in funding, the company has laid off over 100 employees and is experiencing losses in more than 70% of its stores. The situation is attributed to management issues and aggressive expansion strategies similar to those of Zomato, led by Sujit Kumar, a co-founder of Zomato and a major investor in Third Wave. The company is now burning through cash and has about a year's runway left, with one of the co-founders and CFO, Suan Goyle, moving to an advisory role. The Cap Table report is recommended for further insights into the company's troubles.
đïž Zomato's Expansion into Movie Ticketing Business
The script outlines Zomato's confirmed talks with Paytm to potentially acquire its movie ticketing business, marking Zomato's largest acquisition since Blicket. The move is speculated to be a strategic expansion into the ticketing sector, leveraging Zomato's existing food delivery service to offer bundled movie and food deals. The potential acquisition could increase Zomato's revenue through ticket sales and associated food orders, mirroring the successful business model of Indian theater chains like PVR Inox. The script also mentions Zomato's previous acquisition of Blicket and its current profitability, as well as the company's investment in its live events and ticketing business, Zomato Live.
đ€ Unacademy and K12 Techno Services' Potential Merger
The script touches on unconfirmed reports of Unacademy being in talks with K12 Techno Services for a potential merger. If the deal goes through, it could result in a joint venture with equal stakes for both companies. Unacademy has previously invested in K12 Techno Services, and such a merger could provide Unacademy with access to over 75,000 school students and a full-stack education content and technology platform serving more than 900 educational institutions. The news is speculative, and no official confirmation has been provided by either company.
đ IN-SPACe's Pre-Incubation Entrepreneurship Program
The Indian National Space Promotion and Authorization Center (IN-SPACe) has launched a pre-incubation entrepreneurship program aimed at early-stage space startups, defined as companies established on or after July 1, 2022, and students interested in space technology. The 20-month program is designed to support the ideation, innovation, and prototype demonstration of space technology startups with expert guidance. Interested individuals can find more information about the program through a provided link in the video description.
đ Iigo's Successful IPO and Market Performance
The script reports on Iigo's parent company, Le Travenues Technology, which was listed on the stock market at 138.4 rupees per share, receiving a 48.5% premium over its IPO price of 93 rupees per share. The company closed its first day at 165.7 rupees on the NSE and 161.5 rupees on the BSE. Iigo has been described as a 'boring' business by its co-founder Ranesh Kumar, but its steady growth over 18 years and successful IPO indicate that such a business model is well-received by the market.
đ° Indian Startups' Funding Roundup
The script provides a roundup of funding raised by Indian startups in a week, totaling $176 million, slightly less than the previous week's $192 million. Key funding events include UHFL's $76 million Series F round, Be 91's $25 million raise, Ragin's $15 million funding with participation from Ki and Brand Invader, fintech startup Pop's $2.4 million seed round, Prosper.io's $1.55 million pre-seed round, vegan ice cream brand GoZero's $1.5 million pre-Series A round, and generative AI startup AA's $1.5 million seed round. The script also mentions a podcast collaboration with Google Play, featuring an interview with the founders of Programming Hub, who have built a profitable, bootstrapped business with over 40 million students using their platform.
Mindmap
Keywords
đĄZomato
đĄThird Wave Coffee Roasters
đĄFunding Round
đĄLayoffs
đĄUnacademy
đĄMerger
đĄIN-SPACe
đĄIPO
đĄFintech
đĄAcquisition
đĄStartup
Highlights
Zomato is in talks to acquire Paytm's movie ticketing business, which could be its biggest acquisition since Blinket.
Third Wave Coffee Roasters, after raising $35 million, has laid off over 100 employees and is facing significant losses.
Sujit Kumar, co-founder of Zomato, has become a significant individual shareholder in Third Wave Coffee Roasters and is heavily involved in its operations.
Third Wave Coffee Roasters is burning through $5 million every month, with 70% of its outlets in losses and only a year of runway left.
Zomato's potential acquisition of Paytm's ticketing business could be a strategic move to combine movie ticket sales with food delivery, enhancing revenue streams.
Unacademy is reportedly in talks with K12 Techno Services for a potential merger, which could create a joint venture with each holding a 50% stake.
IN-SPACe has launched a pre-incubation entrepreneurship program for early-stage space startups and students interested in space technology.
Iigo's parent company, Le Travenues Technology, was listed on the stock market at a premium, reflecting investor confidence in the 'boring' yet successful business model.
Indian startups raised a total of $176 million this week, slightly less than the previous week's $192 million.
Umid Housing Finance raised the largest funding round of the week, $76 million in their Series F round.
New Delhi-based beer brand 'BE 91' secured $25 million in funding.
Bengaluru-based fashion brand Ragin, with Brand Invader as an investor, raised $15 million.
Fintech startup Pop, offering cash back in Pop coins for UPI transactions, raised $2.4 million in their seed round.
Prosper.io, a fintech platform for automating tax filings, secured $1.55 million in their pre-seed round.
Mumbai-based vegan ice cream brand GoZero raised $1.5 million in their pre-Series A round.
Bengaluru-based generative AI startup AA, offering AI-driven product photo shoots, raised $1.5 million in their seed round.
A podcast collaboration with Google Play features an interview with the founders of Programming Hub, discussing their bootstrapped and profitable business model.
Transcripts
there's a surprising amount of action
happening right now in India's food
beverage and restaurant space so on the
one hand you have zato which is trying
to buy paytm's movie ticketing business
and then on the other hand it looks like
trouble might be Brewing at third wve
coffee roers and we'll talk about that
one first so just last year third wave
coffee roaster had raised a massive $35
million funding round and a short while
later the Ken published this story
titled third wave coffee is bad news for
Starbucks and a lot of people thought
that wave coffee roosters was going to
wipe out Starbucks from India but here
we are in 2024 and the reality is
completely different the company had
laid off more than a 100 employees
months after their biggest fundraiser
and today More than 70% of third wve
coffee roaster stores are in losses so
what exactly is going on at this company
well this detailed report by the cap
table shares some insights about third
wave's troubles and it all boils down to
their business and their management so
back in 2018 Ordon had raised 22 $25
million and became one of the fastest
unicorns in India and around that time
sujit gumar one of the co-founders of
Iran had started working out of this
little known coffee Outlet in bangaluru
called third wve Coffee Roasters to stay
away from all the chaos at oron's office
eventually sojet ended up investing in
this coffee business and today he's
actually the third biggest individual
shareholder after the three co-founders
of the company and that wouldn't have
been a problem if soit had just stayed a
shareholder but instead he decided to
act like a co-founder in fact here's a
quote from one of third wve coffee
roosters investors quoted in the cap
tables report the founders have very
little say in operations and it is sujit
Kumar co-founder of Ordon and an angel
investor calling all the shots the same
investor even said that soit tells
people at parties that he has built
third wve coffee roters and it's kind of
true the report says that soit played a
huge role in helping third wave coffee
roaster secure additional funding expand
to new regions and get prominent
investors soj was the one who got
Westbridge capital and cragus and these
are the two biggest investors in the
company however it looks like sujit went
about building third wave coffee
roosters the same way that he built oron
he spent a lot of money to expand
quickly and get more market share at the
cost of profitability today third wave
Coffee Roasters is burning five Cotes
every month 70% of all their coffee
Outlets like I mentioned earlier are in
losses and they only have about one year
of Runway left on top of that one of the
co Founders and the CFO of third wve
coffee roaster suan Goyle has moved to
an advisory role without giving any
reasons and if you want to dive into all
the details I would highly recommend
that you go check out the cap tables
report it's a great read all right now
moving on to the next news item here
zamato has confirmed that they are in
talks with PTM to potentially acquire
their movies and ticketing business this
would make it zomato's biggest
acquisition since blinket now a lot of
you might be wondering why zato would
want to get into the ticketing business
in the first place and pay so much for
it you might even start to think that
theend Goyle is crazy for doing
something like this in fact a lot of
people called him crazy for paying more
than 4,000 Cotes for blinket which was a
loss making business at the time but
today we call him a genius because he
successfully managed to push blinket
towards the path of profitability while
boosting its Revenue now coming back to
my original question why does zato want
to buy ptms movies and ticketing
business well honestly no one really
knows for sure but I have a couple of
ideas see According to some estimates
PTM is currently making around 300 to
350 groto bees selling movie and Live
show tickets and the thing is whenever
you're booking a movie ticket on
platforms like PTM or book my show you
simply book your ticket and then you get
out of the app you close it but zamato
sells food so think about that for a
second if zamato is selling a movie
ticket and gives you the option to buy
food and beverages along with it well I
think a lot of people will take that
option and of course when you make that
purchase zato gets a nice little cut
from both the movie ticket sale and also
from the sale of food from the
restaurant partners and obviously food
and movies are a great combination just
look at PVR Inox which is one of the
biggest theater chains in India they're
making more than 35% of their revenue by
selling food and Beverages and so I feel
like that's exactly what zamato is
trying to do here with the acquisition
of PM's movie and ticketing business in
fact zamato is already made more than 50
Cotes from selling tickets through their
own platform in FY 23 and just last week
zato even said that they'll be investing
a 100 crupes in zato live their Live
Events and ticketing business now
speaking of potential Acquisitions an
academy is in talks with K12 techn
services for a potential merger and this
company operates 90 plus Orchid schools
across the country now these reports
have not been confirmed by either of
these two companies so do take this news
with a grain of salt but if the deal
materializes the two companies might end
up creating a join Venture with each of
them having a 50% % stake in the
combined entity and according to this
end trck report an academy has already
invested in K12 techno services in fact
even 3 years back there were reports
that unacademy was going to acquire K12
techno services but at that time nothing
happened unacademy launched their first
offline Learning Center back in 2022 and
the number of students at their offline
centers has been growing consistently
then earlier this year physics Walla
went ahead and launched their own school
but this merger with K12 techn Services
could open up a lot of doors for an
Academy first they'd have access to more
than 75,000 school students to expand
their business but that's not all
because K12 techn Services also offers a
full stack education content and
Technology platform to more than 900
educational institutions as well all
right next up in the news the Indian
National Space promotion and
authorization Center also known as
inspace has launched a pre-incubation
entrepreneurship program for early stage
space startups now to be clear early
stage space space startups in this case
means companies that were established on
or after the 1st of July of 2022 but the
program is also open for students
interested in space technology as well
it's an extensive 20-month long program
which will help you ideate innovate and
demonstrate your prototype with the help
of experts so if this is something that
you're interested in you can find out
more details about this program using
this link in the description of this
video all right next up in the news
earlier this week io's parent company Le
traven's technology was was listed on
the stock markets at 138.4 rupees per
share getting a 48.5% premium on its IPO
price of 93 rupees per share on the NSE
the National Stock Exchange they closed
their first day at 165.7 to rupees on
the nsse and 161.5 rupees on the BC the
Bombay Stock Exchange and iigo is one of
those businesses that's been building
slowly out of the Limelight that most
Indian startups get in fact it took them
18 years to get to their IP and in an
interview with the ark web ranes Kumar
one of the co-founders of iigo even said
that it was a boring business but boring
is good and the stock markets clearly
agree with him all right now let's move
to the funding News segment for today's
video so this week Indian startups
raised a total of $176 million which is
slightly less than last week's $19.2
million now taking a look at some of the
companies that raised funds this week
first of all we have goodr based lending
company umid Housing Finance and they
raised $76 million in their Series F
round making it the biggest funding
round this week next we have new Dil
based beer brand be 91 and they raised
$25 million and then after that we have
Balu based fashion brand Ragin which has
v Ki as their investor and brand invador
and they raised 15 million following
this we have bangal Bas fintech startup
pop which gives you cash back in the
form of Pop coins for every UPI
transaction that you make using their
platform and you can use these coins to
shop on their curated e-commerce
platform which is kind of like cred
coins and creds Marketplace and they
raised $2.4 million in their seed round
next we have another bangaluru based
fintech platform prosper. iio which lets
you automate your tax filings and they
raised $1.55 million in their preed
round after that we have Mumbai based
vegan ice cream brand gozero and they
raised $1.5 million in their pre-series
a round and then finally we have bangl
based generative AI startup AA which
lets you create studio quality product
photo shoots without actually doing the
photo shoots by using their custom AI
model instead and they raised $1.5
million in their seed round now before I
let you guys go you should definitely
check out the podcast that we recently
made in collaboration with Google play
this is me sitting down with the
founders of programming Hub and this is
an incredible story these guys built a
completely bootstrapped profitable
business it's massive now they have more
than 40 million students using their
platform and I think you'll really enjoy
it but either way thank you so much for
watching this episode of backstage with
Millionaires and I will catch you in the
next one
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