In a country where chai is a daily ritual for millions, startups are attempting to brew newer, more exciting ways of relishing a cuppa. From smoky Darjeeling and turmeric-laced teas to biodegradable sachets, glass bottles and artisanal blends, it’s a storm of ideas in a teacup.
Young entrepreneurs in the world’s second-largest tea producing country are turning the centuries-old beverage into a newgen-friendly brand story — with sleek packaging, wellness hooks and Instagram-ready aesthetics.
Market intelligence platform Tracxn reports that India’s tea startup sector secured over $187 million funding during 2019-25. Funding peaked in 2022 at $64.04 million across 12 rounds. It stands at $6 million so far this year.
It certainly helps that India is among the world’s top tea-consuming countries, with 80 per cent of domestic production sold within the country. It also boasts world famous varieties such as Assam, Darjeeling and Nilgiris.
“India is certainly a tea-drinking country,” asserts Harish Bijoor, business and brand strategy expert. “For every cup of coffee consumed, the cups of tea drunk are possibly 100x. In such a tea-dominated country, there is an opportunity for the niche and different teas positioned to be distinct due to where they’re grown, the allure they give and plucked by people who are well taken care of. The many politically correct stories will create category differentiation. Whether it be tea or coffee, you will see a fair bit of action in these spaces,” he predicts.
Take The Infused Kettle, for instance, which promises a range of blended green tea that is infused not with flavours but “the real deal”.
As its founder, Shalini Sinha, explains, “Our rose tea, for example, is a blend of green tea with rose petals, dried by hand. We also add spices like cardamom and cinnamon to enhance the flavour, as plain green tea with rose petals can taste bland.”
Most of the brand’s teas — in blends such as purple cranberry and strawberry — can be enjoyed hot or cold. The teas are blended to retain the goodness, and not the bitterness, Sinha adds.
Differentiation
Contrasting the nimble-footed startups with the legacy brands that have dominated the $11.5 billion Indian tea market, Bijoor says, “They (legacy tea brands) are pretty pari passu in their imageries and have forever depended on advertising imageries to define them, so product development norms have been rather limited.”
The new-age tea companies flaunt product differentiation that banks on the “correct narratives” — organic, and good for consumers and the earth.
Taking on heritage brands that command legions of loyal customers is certainly not for the faint-hearted. Ask Shubham Sharma, co-founder and Managing Director of Macha Tea. “My maternal grandfather was from Assam, so there was always a tea influence in the family. When my brother and I wanted to build a company, tea seemed like a safe bet since it does not have a short shelf-life,” he says. But that put them in direct competition with biggies like Tata Tea and Wagh Bakri.
“When we thought we had no chance of survival, my mother created this beautiful blend of tulsi, adrak and elaichi. We don’t add essence or oils for the flavour but raw spices alone. This hero product of ours forms 70-75 per cent of our revenue,” he says.
Sunil Saha, too, set out to break the clutter when he co-founded Blue Tea in 2018. “Though green tea has been marketed for 35-40 years, there has been no serious innovation. We saw an opportunity and launched Indian ayurvedic herbal teas in packaged form,” he says. The idea was to revive the concept of flower-based teas, which were once brewed in homes using ingredients grown in the backyard, he says.
While regular tea dominates the market, trailed by green tea, the niche herbal tea segment too is steadily growing, he says.
“Green teas are bitter but our teas made with flowers are naturally sweet. Moreover, green tea has caffeine, while flower-based teas don’t. This is a primary difference we played upon and it worked brilliantly for us,” he says.
For Bala Sarda, who founded VAHDAM India as a direct-to-consumer (D2C) online tea brand in 2015, the focus was on disrupting the supply chain of tea. “With a family legacy of over 90 years in the tea business, I had a strong connection to the industry. I joined my family’s enterprise for a few years, where I identified significant gaps and the absence of a home-grown brand to address them,” he says.
“The vertical integration ensures highest quality teas and spices, while maintaining complete control over the supply chain.”
Export muscle
Given that India is a leading exporter of tea, the startups are making a splash in this area too.
Sarda says his products are shipped to over 5 million consumers across 148 countries. In fact, 97 per cent of VAHDAM India’s revenue comes from international markets, including the US and the UK, he says. It also retails at Walmart and Costco.
The Infused Kettle, which clocks 90 per cent of its sales online, has been exporting to Canada and the US for the last two years, focusing on the gifting segment. Sinha says she plans to export to more countries soon.
Blue Tea exports to 13 countries, including the US, Germany, France, Spain and the UK. The company, which generates ₹5 crore monthly revenue, registers 99 per cent of its sales online. In the quick commerce segment, it is present across 300 dark stores and targets 1,000 by the year end.
Macha Tea, on the other hand, retails offline across one lakh retail stores, mainly in north India. It is authorised to supply to Army canteens, which account for one-third of its revenue at ₹25 crore. Within eight years, its production has risen to 2.5 lakh kg per month.
Funding growth
Macha Tea, The Infused Kettle and Blue Tea have all been bootstrapped so far.
While The Infused Kettle is exploring funding opportunities through government-backed initiatives, rather than private equity, Blue Tea has secured interest from Aman Gupta on the business reality TV series Shark Tank and plans to raise around $5 million to strengthen its offline footprint.
VAHDAM has raised around $35 million from marquee investors, including Fireside Ventures, Sixth Sense Ventures and IIFL (360.One), family offices like Mankind Pharma and SAR Group, and celebrities like Abhishek Bachchan and Sachin Tendulkar.
It recently secured $3 million in strategic equity funding from SIDBI Venture Capital to bolster its balance sheet and cash reserves.
With production touching 1.18 billion kg in H1FY25, India’s tea market is expected to reach $15 billion by 2033. That’s a cup that promises to cheer the startups in the fray too.