Specialty Coffee Startups Enticing VCs with Strong Margins

Specialty coffee chains attract more venture capital than D2C players without retail presence

Specialty coffee chains in India are garnering greater interest from venture capital funds compared to direct-to-consumer (D2C) players without any retail presence. Investors and founders attribute this trend to better unit economics in the coffee chain industry. In the past two years, Indian specialty coffee café chains have raised close to $100 million in venture capital, compared to a cumulative $22 million in the four years prior, according to data from Tracxn. This surge in investment can be attributed to the growing coffee consumption in India and the falling cost of capital expenditure.