Third Wave Coffee raises Rs 408 crore to fuel 500-store expansion

MUMBAI: Third Wave Coffee is brewing up a bigger footprint. The Bengaluru-based café chain has raised Rs 408 crore from existing investors Westbridge Capital and Creaegis as it targets 400-500 stores over the next few years, according to a report by Mint.

The funding round was led by Westbridge Capital and was largely through a primary issuance, with Creaegis and other angel investors also participating. A small secondary component allowed some early investors to sell part of their holdings.

The latest round values Third Wave Coffee at about Rs 2,000 crore. Westbridge’s stake is expected to rise to around 47 per cent, while Creaegis will hold close to 15 per cent. The remaining stake will be held by the founders and other angel investors, according to the Mint report.

The fresh capital will be used to expand the company’s retail network, increase store density in key markets and enter smaller cities. Third Wave currently operates around 240 outlets and plans to enter nine new cities, including Ludhiana, Jalandhar, Amritsar and Lucknow.

The company has also expanded into Ahmedabad and Kolkata and is evaluating markets such as Guwahati, Ranchi, Patna and Bhubaneswar as it looks to deepen its presence across tier-II and tier-III cities.

Founded in 2017 by Sushant Goel, Ayush Bathwal and Anirudh Sharma, Third Wave Coffee operates cafés across cities including Bengaluru, Delhi, Pune, Mumbai and Hyderabad. Its portfolio also includes coffee beans, cold brew bags and merchandise.

The expansion is not limited to cafés. Third Wave has been broadening its food and beverage offering to capture more consumer occasions.

The company recently entered the dessert category through Third Rush, which has been rolled out selectively and is planned to reach 50 stores by the end of 2026.

Its wider product strategy includes signature non-coffee beverages, all-day menus, seasonal and festive offerings, breakfast, savoury items and other food and beverage formats.

Third Wave has been adding around 80-100 stores annually and plans to end FY27 with roughly 320 outlets, before moving towards its longer-term target of 400-500 stores.

The company’s revenue is estimated to have grown 30 per cent to around Rs 337 crore in FY26, although its audited financial results are yet to be filed, according to the report.

Heisetasse Beverages Pvt Ltd, which operates Third Wave Coffee, reported operating revenue of Rs 268.6 crore in FY25, up from Rs 241.3 crore in FY24. Its losses narrowed to Rs 94.4 crore from Rs 152.4 crore during the same period, according to filings sourced by Tofler from the Ministry of Corporate Affairs.

The latest investment marks another round of backing from Westbridge, which has been an investor in Third Wave since its earlier funding stages. Westbridge led the company’s $21 million Series B round in 2022, following its $6 million Series A in 2021.

In 2023, Third Wave raised about $35 million in a round led by Creaegis, with participation from Westbridge, at a valuation of around Rs 1,300 crore, according to market intelligence platform Tracxn.

The latest fundraise comes as India’s organised café and food services market continues to expand. The country’s food services market, valued at about $80 billion in 2024, is expected to grow at a 10-11 per cent compound annual growth rate through 2030, according to Redseer.

India’s coffee market was valued at around $1.2 billion in 2023 and is projected to reach $2.6-3.2 billion over the next two years, growing at a 15-20 per cent CAGR, the consultancy has estimated.

With more domestic and international chains entering the market, Third Wave is now betting that a wider menu, deeper geographic reach and a much larger store network can help it stay ahead as India’s coffee habit continues to percolate beyond the biggest cities.