Nothing Before Coffee eyes $4m raise to disrupt India’s coffee scene

The homegrown brand has already outlined its plans to build 400 stores across the country. 

India’s Nothing Before Coffee (NBC) is seeking $4m in venture capital to fund an ambitious plan to open 400 new cafes in the next two years, as it challenges the likes of Starbucks in what used to be a mostly tea-drinking nation.

The company is positioning itself between street coffee vendors and premium coffee operators to disrupt the status quo, banking on rising demand in the world’s most populous country.

“Our company-owned stores are profitable,” NBC co-founder Anand Jain said in an interview. But the profit is just enough to fund two stores each quarter, not the average of 16 stores it needs to put up each month in the next 24 months.

“It won't be easily possible to reach 400 stores in two to three years,” he said. “For that, we will be going for a funding round and planning for a $4m funding raise as well.”

Jain said India’s market potential is similar to other large nations. “With a similar population size and a mix of Tier 1 and Tier 2 cities, we see the possibility of significant expansion,” he said.

“If 12,000 stores are feasible elsewhere, why not 400 in India? We’ve identified a gap in the market that we believe we can fill,” he added.

NBC has about 60 stores around India that sell freshly brewed coffee at 40% the price of a Starbucks cup.
Luckin Coffee and Cotti Coffee in China have shown that affordable quality coffee can disrupt the status quo. Jain and co-founder Akshay Kedia think accessible pricing can be adapted to the Indian market.

“Our basic strategy is to bring out trending products or whatever flavours are trending in the market,” Kedia said, citing as an example the popularity of Oreo and KitKat. “Everyone wants to have a piece of it.”

Four friends — Jain, Kedia, Ankesh Jain, and Shubham Bhandari — founded NBC in 2017 with a startup capital of Rs3m ($36,000). It had four stores when it started franchising the brand.

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Now, it consists of 20 company-owned stores and 40 franchise stores. It serves a variety of drinks such as coffee, tea, shakes, slushies, and mocktails as well as snacks.

Kedia said being successful in the coffee business involves knowing your market and developing products that fit their needs — and wants, a strategy that global coffee brands have used.

International expansion

About 20% to 30% of NBC’s selections are considered “star products” or bestsellers, Kedia said. New products usually account for 6% of the menu, and the share goes up to 10% as they become more popular, he added.

The company has tried selling pink cappuccinos and colourful slushies as consumer habits changed. The brand has 100 beverages on its menu including tea and slushies.

Kedia said NBC is building a strong team to hit its goal of about 16 new stores a month in the next two years.

“We have already mapped all the cities [where] we want the 400 outlets,” he said. “It’s a set plan. Along with it is investing in the tech part of the business — not just the customer side but [also] the backend side.”

NBS staff workers are trained using a learning management system (LMS), and teams coordinate through enterprise resource planning software. Inventory management is also done using technology.

“Our purpose for the LMS was to standardise the training plan in India,” Jain said, adding that Portugal staff members were also trained on the LMS platform. Every employee can sign in on the platform and access all the recipes and standard operating procedures.

NBC has 20 units in the fit-out and construction stages that it expects to open in India by October. It also plans to add one more branch to its lone store in Porto City, Portugal. 

Jain said the coffee chain’s international expansion focus is on the Middle East and Asia, where it plans to open a branch in Indonesia. 

The company would continue to invest in technology, particularly in its enterprise resource planning system, he said.
“We are also entering the retail market with our bottled coffees and soon, our instant coffee,” Jain said. “We have already started production. Our goal is to tap every local home for those products.”