• Third Wave Coffee's net losses for FY24 surged to Rs 110 crore, primarily due to high employee costs and rent.
• Despite losses, the company's revenue increased to Rs 241 crore in FY24, up from Rs 144.4 crore in FY23.
• Indian coffee exports have seen a 55% increase, reaching Rs 7,771.88 crore in the first half of FY25.
• Despite financial challenges, Third Wave Coffee's growth and the rising global demand for Indian coffee could lead to future profitability.

In a recent financial revelation, Third Wave Coffee, a specialty coffee chain based in Bengaluru, India, reported a significant increase in its net losses for the fiscal year 2024. The company's losses escalated more than two-fold, reaching a staggering Rs 110 crore, marking a substantial increase from the previous fiscal year. The surge in net losses is primarily attributed to an excessive cash burn, particularly on employee costs and rent. The company, which enjoys the backing of prominent investors such as Nithin Kamath, the Co-founder and CEO of Zerodha, witnessed a sharp rise in its employee benefit cost.

This cost accounted for 27 per cent of the total expenditure, marking an increase of over 68 per cent to Rs 97.26 crore in FY24, according to the company's financials. In addition to the employee benefit cost, the company's overall expenses also saw a significant rise. The total expenses for FY24 stood at Rs 358 crore, marking a 78 per cent increase from Rs 201 crore in FY23.

Third Wave Coffee's Revenue and Expansion Plans

Despite the mounting losses and escalating expenses, the company's revenue from operations showed a promising upward trend. The revenue for FY24 was Rs 241 crore, a substantial increase from Rs 144.4 crore in FY23. This indicates a potential for growth and profitability, despite the current financial challenges. Third Wave Coffee, which currently operates more than 100 cafes across India, has ambitious expansion plans for FY25.

The company has managed to raise around $65 million to date from investors such as WestBridge Capital, Creaegis, and Redbrook. In September, the company secured an additional $35 million in funding, pushing its valuation to $155 million. The company's financial performance and future plans come at a time when the global demand for Indian coffee is on the rise.

Surge in Indian Coffee Exports

In the first half of the current fiscal year (FY25), India's coffee exports reached Rs 7,771.88 crore, a massive 55 per cent increase from Rs 4,956 crore during the same period last fiscal. This surge in exports is backed by data from the Coffee Board of India, which shows a 15 per cent volume increase in coffee exports for the April-September period. The country exported 2.2 lakh tonnes of coffee, up from 1.91 lakh tonnes in the same period last year.

India's coffee production was nearly 3.6 lakh metric tonnes in the 2023-24 crop year. During 2021-22, Indian coffee exports stood at $1.016 billion, growing by 38 per cent from the previous year 2020-21. In the year 2021-22, India was the fifth largest exporter of coffee in the world with a share of about 6 per cent of global coffee exports.

The rise in global demand for Indian coffee and the country's increasing coffee exports present a promising landscape for companies like Third Wave Coffee. Despite the current financial challenges, the company's growth trajectory, coupled with the rising global demand for Indian coffee, could potentially steer it towards profitability in the future.