NEW DELHI: Packaged coffee brand Sleepy Owl has raised $6.5 million in a Series A funding round led by existing investor Rukam Capital and Consumer Partners.
The funding will be used to expand the direct selling brand’s core team founded in 2016. The company will also expand the brand’s distribution network across India and strengthen its marketing initiatives.
Founded in 2016, Sleepy Owl sells cold brew packs, hot brew bags, ready-to-drink cold brew bottles, ground coffee, brew box suites for home and on-the-go consumption. . The company was co-founded by Ajai Thandi, Arman Sood and Ashwajeet Singh.
The brand, which started online, has since its inception moved to modern large-format trade stores to initiate consumer trials.
Internet-focused brands have found favor with consumers and investors as they fill a void in the mid- to high-end packaged food market and in the beauty and personal care market.
The pandemic has also created a demand for products that can replicate out-of-home dining experiences at home.
Ajai Thandi, co-founder of Sleepy Owl, said the pandemic has helped the company refocus its priorities.
“We were nimble and quick in resolving issues, and were able to get back on track with higher numbers…we plan to use the funds to deepen our existing retail markets across India and adding them as we grow,” Thandi said.
The Indian coffee market is dominated by big brands such as Nestlé, ITC Ltd. and Hindustan Unilever Ltd. These companies sell coffee in a powder form intended for easy preparation. However, as consumers seek better experiences, they are willing to pay for formats separate from what is already available in the market.
Archana Jahagirdar, managing partner of Rukam Capital, said the funding will help the brand’s pan-India presence.
“With this investment, we are confident that Sleepy Owl will gain the necessary impetus to further develop its business and expand its operations. The brand has huge potential to be among the fastest growing formats in the coffee business category,” Jahagirdar said.
Sleepy Owl has also expanded its product portfolio from cold brew to hot brew sachets, drip coffee formats, ready to drink formats, flavored ground coffee; it recently launched a subscription service.