Less than three months after successfully raising $35 million in a Series C funding round, Bengaluru-based Third Wave Coffee, a prominent player in the Quick Service Restaurant (QSR) coffee segment, has undertaken a significant workforce restructuring. The move has resulted in the termination of around 10% of the company’s employees, impacting various departments.
Sources reveal that the layoff process commenced earlier this week, affecting over 80 employees. Additionally, the startup has reportedly delayed clearing payments to some of its vendors for an extended period.
In response to the restructuring, Third Wave Coffee released a statement acknowledging the move. The company stated, “TWC post a strategic review has decided on a one-time restructuring exercise to consolidate our teams, impacting less than 10% of the organisation. As an organisation, we are in a strong position post the recent fundraise. We will continue to scale and build TWC as India’s most loved coffee brand.”
However, the statement did not address queries regarding pending vendor payments or provide details about the severance packages offered to affected employees.
Third Wave Coffee, which currently operates over 100 stores across the country, had around 580 employees according to LinkedIn. The startup raised $35 million in September in a funding round led by Creagis, with participation from existing investors such as WestBridge Capital and Udaan co-founder Sujeet Kumar. Reports suggest that the funding valued the startup at $150 million.
At the time of the funding announcement, Third Wave Coffee expressed its intention to use the capital infusion to enhance technology and product innovation for an improved cafe experience nationwide.
Founded in 2017 by Ayush Bathwal, Anirudh Sharma, and Sushant Goel, the startup witnessed a 230% increase in losses, reaching INR 14.6 crore in FY22. However, its total revenue surged by 177% to INR 32 crore during the same fiscal year.
Third Wave Coffee faces competition from notable players in the coffee market, including Slay Coffee, Blue Tokai, and Starbucks, among others.
