Third Wave Coffee raises Rs 408 crore in funding round led by WestBridge Capital

Third Wave Coffee has raised Rs 408 crore ($43 million) in a funding round led by existing investor WestBridge Capital, as it looks to step up a store expansion drive amid intensifying competition in the premium cafe market.

The round, comprising a mix of primary and secondary capital, also saw participation from existing investor Creaegis and angel investors, the speciality coffee chain said on Monday. The company did not disclose its valuation or the split between the primary capital and secondary share sales.

Third Wave said it will use the fresh capital to expand in existing markets, enter new cities and build out newer categories, including Third Rush Desserts, which it launched earlier this year.


The company currently operates more than 240 cafes across India and plans to increase the count to 320 by the end of the current financial year. It expects to enter eight new geographies by next month.

“Our focus remains on scaling the business sustainably, with strong unit economics, healthy store payback economics and operational discipline,” chief executive Rajat Luthra said. The company’s longer-term plan is to add around 100 cafes every year, he added.

Third Wave has expanded into Ahmedabad, Mangaluru and Agra over the past year while adding outlets in Delhi-NCR, Hyderabad, Chennai, Mumbai and Pune. It entered eastern India in June with three cafes in Kolkata and is evaluating other markets, including Guwahati, Ranchi, Patna and Bhubaneswar.

The rapid expansion comes as coffee chains bet on rising consumption and a still underpenetrated branded cafe market, while increasingly competing on store density, menu innovation and newer consumption occasions beyond coffee.

Blue Tokai, which operates about 240 outlets, plans to add around 120 cafes this financial year and reach 800 by FY30, Bloomberg reported last month. Tata Consumer chairman N Chandrasekaran said in June that Tata Starbucks, which had 502 stores across 80 cities, would continue to add 50-100 outlets annually. ETtech has previously reported on increased venture funding and expansion among newer coffee brands, including Subko and AbCoffee, alongside the entry of global chains such as Tim Hortons and Pret A Manger.

Third Wave's latest funding is largely follow-on capital from investors already on its cap table. WestBridge had led a $21 million round in the company in 2022. In September 2023, Creaegis led a $35 million fundraise, in which WestBridge and Udaan cofounder Sujeet Kumar also participated. ET had reported then that the transaction valued Third Wave at around $150 million. No new institutional investor was named in the latest round.

The fundraise comes after a management and operational reset at the Bengaluru-based company. In 2024, former KFC India and Nepal head Luthra took over as chief executive from cofounder Sushant Goel, who moved to the board. The company had also undertaken a restructuring in late 2023, affecting less than 10% of its workforce, shortly after its Creaegis-led fundraise.

Third Wave's operating revenue rose 67% to Rs 241 crore in FY24, while its net loss nearly doubled to Rs 110 crore as employee, material and rental costs increased amid the store expansion.