Blue Tokai's revenue jumped 59% to ₹518 crore in FY26, but its losses rose 54% to ₹83 crore. We suspect India's coffee startups don't have a coffee problem. They have a real estate problem.
Founders saw Starbucks charging ₹300 for a drink and believed they could offer better coffee, nicer interiors and lower prices. But a customer who buys one ₹350 cappuccino can occupy a table for hours. The rent, salaries and electricity bills keep running. At Blue Tokai, employee costs reached ₹130.5 crore and depreciation ₹87 crore. Revenue grew 59%, but operating earnings before interest and depreciation grew only 19%.
Third Wave learnt this painfully. It lost ₹152 crore on ₹249 crore revenue in FY24; reportedly, nearly 70% of its cafés were losing money. After management tightened operations, losses fell to ₹94 crore in FY25. It now claims more than 95% of outlets make money individually, yet the company remains loss-making. Its move toward smaller stores and more food sales tells its own story.
The warnings were already visible. Starbucks has spent 14 years building 502 Indian outlets and still lost roughly ₹99 crore in FY26. Costa cut its network from 220 to 198 stores while increasing revenue. Jubilant, despite its success with Domino's, is walking away from Dunkin after the chain shrank from more than 70 Indian outlets to 27.
Coffee isn't alone. Chaayos lost ₹25 crore in FY25, and Wow! Momo lost around ₹114 crore. Selling food is easy to celebrate; making enough on each order is harder.
Café Coffee Day offers a clue. Its cafés averaged only ₹21,101 in daily sales, but the company also ran roughly 55,800 vending machines. Offices don't need expensive sofas or prime high-street locations.
We see two coffee businesses emerging. The first is the spacious premium café: higher bills, but expensive rents and customers who linger. It can work in mature markets. Starbucks reported a 9.7% global operating margin in FY26, even while its Indian venture lost money. The second is the compact pickup outlet: lower spending per visit, but cheaper space and faster turnover. China's Luckin had 99% pickup stores and earned a 17.8% store-level margin in 2025, with a 10.3% company-wide operating margin. Those aren't identical profit measures, but both models can make money. In India, we would bet on the second scaling faster, while the first survives in fewer, busier locations.
Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.
“Maamla Legal Hai”: IPO-Bound Cult.fit Faces Fresh Legal Challenge
Cult.fit’s IPO journey has hit a legal speed bump as the Madras HC examines a challenge to its CULT trademark ownership.
Co-founder Deepak Poduval alleges forgery in trademark transfer deeds, while Cult.fit denies the claims.
The Chai Take: For an IPO-bound consumer company, ownership of the flagship brand is a core asset question, not a disclosure footnote.
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“Kuch Naya Ho Jaaye”: Fintech SaaS Company Veefin Migrates To NSE and BSE
Veefin Solutions has moved from the SME segment to the NSE and BSE mainboards, opening its stock to a wider investor pool.
The fintech SaaS firm has also shifted from veefin.com to veefin.ai as it pushes deeper into enterprise AI.
The Chai Take: The mainboard migration widens Veefin’s potential investor base while bringing greater scrutiny.
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“Tu Toh Gaya Beta”: ED Attaches ₹14 Cr Assets In HashPe Crypto Fraud
The ED has attached ₹14.16 Cr worth of assets in the alleged HashPe crypto investment fraud.
The scheme reportedly promised daily returns of 1% and up to 3X gains, allegedly using new investors’ money to pay earlier participants.
The Chai Take: Guaranteed daily returns and referral-led growth are governance warnings, regardless of whether crypto is involved.
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“Naya Yug Naye Niyam”: Kunal Shah Sets Three Priorities For WhatsApp
WhatsApp is looking to evolve beyond chat with bill payments, financial services and bookings on its roadmap.
Kunal Shah says the focus will be richer communication, simpler services and AI.
The Chai Take: WhatsApp already owns distribution; its harder problem is converting conversational intent into trusted transactions without adding clutter.
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“Mubarakan Ji Mubarakan”: EkaCare Selected By NHA To Develop AI-Powered Voice Scribe
EkaCare has been picked by the NHA to build an AI voice scribe for doctors in public healthcare.
It will convert doctor-patient conversations into structured clinical records across more than 15 Indian languages and mixed-language speech.
The Chai Take: Healthcare AI creates value only when it saves clinician time without weakening accountability.
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“Aan Milo Sajna”: IIT Madras Pravartak, BodhBridge Launch Free Online Skill Training
IIT Madras Pravartak and BodhBridge are launching free live online programmes for students and educators in future-ready skills.
The courses aim to bring emerging tech learning beyond traditional classrooms.
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“Jaa Rahe Ho Jaane Jaana”: Gaurav Munjal To Step Down As Unacademy CEO
After a decade at the helm, Gaurav Munjal is stepping down as Unacademy CEO to become executive chairman, while Akhilendra Kumar takes over as CEO.
The leadership change comes just two months after upGrad acquired Unacademy for about $200+ Mn.
The Chai Take: UpGrad must now show that Unacademy can grow inside the group without returning to the cost structure that weakened its standalone story.
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“Tanik Saans Toh Le Lo”: Centre Bans Export of Lithium-Ion Battery’s ‘Black Mass’
The Centre has banned exports of lithium-ion battery “black mass” to encourage domestic recovery of critical metals.
The move comes as India’s refining capacity still trails its black mass output.
The Chai Take: India wants to keep the battery goldmine at home and build its recycling muscle.
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