Calcutta, March 14: Indian tea seems to have caught the fancy of global venture capital funds in the e-commerce space. Online tea seller Teabox has raised its first round of venture capital funding from Accel Partners and Singapore-based Horizen Ventures.
The company, however, did not disclose the deal details.
Accel is known to begin as a small investor, putting in around a million dollar and picking up a 15-18 per cent equity stake in the initial stage. The investment is then scaled up to $3-5 million over a 2-3 year period.
It had earlier invested in e-commerce companies such as Facebook, Dropbox, Flipkart, Myntra and BookMyShow.
For the Teabox deal, Accel is the lead investor with participation from Horizen, which is an early-stage fund focussed on India-based technology and Internet firms.
The involved parties termed the deal as a move to “disrupt the $40-billion global tea industry”.
Since its inception in 2012, Teabox, earlier known as Darjeelingteaxpress, has delivered 5 million cups of tea to over 65 countries, including the Federated States of Micronesia, Chile, Argentina and the Republic of Fiji.
“In e-commerce, it is difficult to scale without know-how and cash-in-hand. To make a dent in the 200-year-old tea industry would need someone like that on board. We shared our vision with Accel and signed the final papers around December-January,” said Kaushal Dugar, founder of Teabox.
Several factors such as the company’s global outlook, the need for the right technological infrastructure and the advantage of being close to the source of the product it sells have found favour with Accel.
Dugar said his company was focussed on building the supply chain infrastructure to bring the most fresh produce to consumers.
It has a centre in Siliguri where the goods are stored and undergo extensive quality check. Plans are in the offing to set up centres in Guwahati and Cochin to be near to the plantations, followed by distribution centres across the US, Europe, Russia and east Asia.
Its Bangalore unit serves as a technology, marketing and customer service base.
According to Prashant Prakash, senior partner at Accel Partners India, companies here need more time to be established and his company was prepared to stay invested for 8-9 years, expecting to bag five to 10 times return on the investment.