The 'Blue Tokai' story

The story is about how the brand is growing and building with resilience and excellence.

In the next four years, Blue Tokai plans to open 800 + stores and generate INR 2,000 Cr revenue. It aims to achieve an EBITDA of around 10 percent, which is very much likely considering the market sentiments and growth potential within the industry.

On the financial front, its operating revenue jumped 69% to INR 215.8 Cr during the year from INR 127.5 Cr in FY23. It ended FY25 with a revenue of about Rs. 341 crores.

On the financial front, Blue Tokai, which competes with the likes of Nothing Before Coffee, Third Wave Coffee, Subko, Rage Coffee, Starbucks, among others, saw its net loss widen 46% to INR 62.9 Cr in FY24 from INR 43 Cr in FY23 due to rising operational costs and aggressive expansion.

Around 70 percent of Blue Tokai’s income comes from company owned and operated cafes and the rest from B2B partnerships and D2C sales.

For over a decade, Blue Tokai has expanded out of necessity rather than ambition. Till the early 2023, it had opened only 57 stores primarily due to limited external capital. This decade allowed the brand to test various size models ranging from 300 sq.ft. to 1000 sq.ft. ultimately helping them decide that 900 sq.ft model as the most efficient.

2023 onwards, the brand embraced scale and growth when it received a substantial external capital of around $30 million. In 2024, the company was valued at Rs.1500 crores.

Blue Tokai adds about eight new outlets a month with each place typically between 900 - 1000 sq. ft.. Each location on an average produces approx. Rs. 2.2 to Rs. 3.3 crores annual revenue turning profitable within 3.5 months and reaching an EBITDA margin between 17 - 27 percent within 6 to 18 months.

In totality, the startup has raised a total funding of about $97 Mn to date, the latest being a raise of $25 Mn (around INR 220 Cr) in a bridge funding round from existing backers, including A91 Partners, Anicut, Verlinvest, and 12 Flags.

In 2024, the brand acquired Suchali’s Artisan Bakehouse which has enabled it to open larger bakeries under the Blue Tokai umbrella.

In a statement, the startup said it plans to deploy the capital to scale its retail operations, strengthen back-end infrastructure and enter international markets, including Dubai (to open 10 outlets in the next 18 months) and Japan (currently operates 2 outlets).

It also plans to use a part of the freshly raised capital to open more stores in India and expand its roasteries and bakery facilities in Bengaluru and Gurugram.

Blue Tokai is moving beyond its core cafe model with a launch of 15 ‘Blue Tokai Origins’ experience centres. These 2000 sq.ft. stores highlight the brands full range of products and narrative.

Its smart leveraging of Quick Commerce platforms has brought it an additional revenue of Rs.30 crores.

The key monetization strategies that the brand uses are:

1. Aggressive cafe expansion of around 100 outlets annually.

2. Successful subscription model

3. FMCG arm

4. Product diversification

The brand has a comparative edge from its strong brand reputation, built on quality, sustainability and transparency. The company's roasting expertise and omni-channel approach combining a significant online presence with a rapidly expanding cafe footprint further differentiates it.

With rising disposable incomes, increasing popularity of cafe culture, and changing preference of consumers, India’s coffee shops / cafes market is expected to cross $1 Bn by 2033, growing at a CAGR of 11.5%. As a result, investors are aggressively backing coffee chains.

The future is promising, the market is expansive - all that matters is an ambition, capital and smart strategies with resilience and a good team.