12 Flags Group, the consumer fund led by Rakesh Kapoor, former global chief of Reckitt Benckiser, has announced its first investment in the specialty coffee chain, Blue Tokai Coffee Roasters, as reported by ET.
Kapoor confirmed the development but declined to comment on further details of the investment at this stage.
The investment by 12 Flags in Blue Tokai Coffee Roasters comes at a time when cafe chains in India are growing faster than quick service restaurants (QSR), driven by younger consumers, aspirational demand, and menu innovation. Alongside emerging specialty coffee chains like Blue Tokai, Third Wave, and Slay, there are established brands such as Tata Starbucks, Costa Coffee, and Barista. Additionally, newer global entrants to the Indian market like British chain Pret a Manger and Canada’s Tim Hortons are also fueling the demand for cafes.
Blue Tokai Coffee Roasters operates with three main verticals: physical cafes, ecommerce, and business-to-business (B2B). The coffee chain runs nearly one hundred cafes. Among the other investors in the coffee chain are A91 Partners and actor Deepika Padukone’s Ka Enterprises.
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According to a report by market intelligence and advisory firm Mordor Intelligence, the Indian cafes and bars market is currently valued at $17.54 billion and is projected to reach $26.17 billion by 2029.
Kapoor launched the India-focused fund last year with an initial corpus of $100 million, targeting investments in consumer-focused businesses in their early to mid-growth stages. The fund’s primary focus areas include consumer health and wellness, pet care, coffee, food, nutrition, and quick-service restaurants.
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“The consumer fund will focus on emerging Indian businesses that we believe hold the potential for considerable growth and outstanding returns. Some of these companies have the potential to evolve into platforms for future growth through category expansion and M&As,” Kapoor, who led the UK-based Reckitt Benckiser Group Plc (RB) for eight years before stepping down in September 2019, said at the time.
At that time, Kapoor mentioned that the fund would offer long-duration capital to companies, invest in structurally attractive categories, and allocate additional capital to consolidate ownership.
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