Australian coffee brand to raise $20 m to venture in newer markets

Australia’s coffee brand Di Bella plans to take the private equity funds route to raise $20 million to venture into overseas markets. The rights to the brand outside Australia are owned by its Indian subsidiary that plan to take the cafes to West Asia and Europe. India is the only country outside Australia where Coffee By Di Bella has its cafes.

Director of Coffee By Di Bella, Rahul Leekha said, “We are close to a valuation of Rs.120 crore at present and would look to raise $15-20 million from PE funds as we expand our operations in India and the overseas markets.’’

In the overseas markets, Coffee By Di Bella would set their cafes in places like Dubai and Qatar and has ambitious plans to enter the UK market. “The UK is a high volume market compared to India. But there will be more competition with big players like Costa, Starbucks and Caribou in this market. The food culture and formats are different in the overseas markets,’’ added Leekha.

Di Bella’s only competitor in India right now is Starbucks. He said “Today only Starbucks, CCD and ourselves are in the organised coffee retail category which is estimated at Rs. 1,700 crore with a CAGR of 20 per cent. But CCD is for the mass market and so the only competitor for us is Starbucks.”

Coffee By Di Bella has just 15 stores and plans to take it up to 20 by year-end, and claims to be a profitable venture in India. “We make sure that each store keeps its rental costs at 15 per cent of the turnover and is profitable before opening a new one. Today, our profits are in excess of Rs. 10 crore as we make sure the ROI directly fits the sales of every outlet. We source our coffees not only from Australia but from plantations in India. Now we are planning to launch Indian blends with names like Monsoon Malabar to suit the Indian palate. Apart from coffee, we are following a heat and eat model,’’ he added.

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