Vahdam Teas raises $2.5m in funding round aiming to disrupt tea supply chain

By Mary Ellen Shoup

- Last updated on GMT

The recent $2.5m cash injection brings the company's total equity investment to $5m.
The recent $2.5m cash injection brings the company's total equity investment to $5m.

Related tags Tea

Vertically integrated and socially-conscious tea company, Vahdam Teas, secured $2.5m in its Series B funding round led by Fireside Ventures to ramp up its customer acquisition rate and fuel its direct-to-consumer business in the US.

The company previously raised $1.4m in a Series A round also led by Fireside Ventures in December 2017, and in January 2018 secured another $650,000 from the private equity firm.

The brand recently opened its first US warehouse in Indiana and an office in New York to support its US business that now accounts for 70% of its revenue.

Founded in 2015 by 27-year-old Bala Sarda, a fourth generation tea entrepreneur, Vahdam Teas procures its teas directly from tea growers in India, packages the tea and ships its directly to the US market, all within days of production.

According to Vadham Teas, this model cuts out the middleman and the company is able to give some of its profits directly back to its network of tea farmers.

The brand generates all of its sales online and has now shipped over 100 million cups of premium teas to consumers in over 85 countries, growing by 1,000% in the last two years.

With the abundance of specialty and premium teas in various formats available, the US is slowly becoming a nation of tea drinkers and the only western country to grow both in terms of consumption and tea imports, according to the Specialty Tea Association.

Last year, Americans drank 84 billion servings of tea in 2017 and became the third largest importer of tea behind Russian and Pakistan. In addition, the bagged/loose leaf tea market remains an important segment of the tea category with a 23% market share, the Specialty Tea Association noted.

“We have seen tremendous customer appreciation for our teas and plan to keep building the momentum. With stronger investment in the brand and our infrastructure, we plan to keep building to achieve our vision of making the freshest teas to consumers worldwide, under a home-grown brand which is socially conscious,”​ Sarda said.

Later this month, Vahdam Teas will launch its first bagged product, a line of ‘Single Serve Pyramid Tea Bags’, adding to its offering of more than 75 loose leaf tea blend.

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