Sleepy Owl raises $6.5 million in Series A funding round

The fresh capital will be used by the company to beef up its core team, build a robust distribution network across India, and for marketing, according to a statement.

Founded in 2016 by Ajai Thandi, Arman Sood and Ashwajeet Singh, Sleepy Owl retails ground coffee in various avatars, including hot and cold brews and ready-to-drink mixes, as well as merchandise. Though the pandemic dented the growth prospects of the company, it is expected to clock an annualised revenue run rate of Rs 60 crore by March 2022.

“The pandemic played the role of a catapult for us. It forced us to take a few steps back to aim at the target. We were agile and quick on problem-solving and were able to get back on track with higher numbers,” Thandi said in the statement. “We plan to utilise the funds to go deeper into our existing retail markets across India and add as we grow.”

Sleepy Owl Coffee has a presence in 1,700+ outlets in Delhi NCR, Mumbai, Pune, Indore, Bhopal, Chandigarh, and Jammu, among other cities, and has catered to more than 60,000 customers.

“The company has demonstrated a strong growth pattern since its launch in 2016, despite the pandemic. With this investment, we are confident that Sleepy Owl will get the required impetus to further scale up its business and expand operations,” said Archana Jahagirdar, managing director, Rukam Capital. “The brand has a huge potential of being amongst the fastest growing formats within the coffee business category.”

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The company, which retails its products on its own website and third-party online platforms, aims to tap into the growing coffee culture in India. According to the firm, the global coffee market was valued at $102.02 billion in 2020 and it is projected to clock a compounded annual growth rate of 4.28% over the next five years. It recently launched a subscription service for its products.

“As it grows, Sleepy Owl is working towards making its products sustainable, reducing plastics and using paper and aluminium. They have stayed true to their mission to introduce more Indians to coffee,” said Deepak I. Shahdadpuri, managing director at DSG Consumer Partners.