Better margins attract VCs to specialty coffee startups

At least two specialty coffee retail startups received significant fund infusions in 2023

- Samiksha Goel

Specialty coffee chains are attracting greater interest from venture capital funds than direct-to-consumer (D2C) players without any retail presence, driven by better unit economics, investors and founders said.

For coffee chains, 2023 was a landmark year, with at least two specialty coffee retail ventures securing significant fund infusions in the specialty coffee startup ecosystem.

This is reflected in data—Indian specialty coffee café chains have raised close to $100 million venture capital in the last two years, compared with a cumulative $22 million in the fours years before that, according to Tracxn.

This is because of the growing coffee consumption in India and falling cost of capital expenditure, investors said.