Sequoia Capital, a global private equity fund, is expected to invest close to $40 million in Cafe Coffee Day. It is learnt that the investment would be a mix of debt and equity, skewed towards debt.
This round of investment comes almost parallel to another investment round which Cafe Coffee Day is closing with IFC for around $15 million, having a majority debt component.
Naresh Malhotra, head, Cafe Coffee Day, however, declined to comment on the deal. Sources indicated the coffee chain was strapping up an expansion plan and was looking at rolling out at least 15-20 outlets a month. At present, it has 311 outlets.
The company is learnt to be targeting to set up 500 outlets by this year-end and is on an ambitious overseas initiative focussed on the European geography.
Cafe Coffee Day is a division of Amalgamated Bean Coffee Trading Company Ltd, a Rs 300 crore (Rs 3 billion) firm.
Coffee Day sources coffee from 5,000 acre of estates, the second-largest in Asia, that is owned by a sister concern and from 11,000 small growers. It is one of India's leading coffee exporters with clients across the US, Europe and Japan.
Coffee Day's business spans across the entire value chain of coffee consumption. Its different divisions include, Coffee Day Fresh n Ground (which owns 350 Coffee bean and powder retail outlets), Coffee Day Xpress (which owns 341 Coffee Day Kiosk), Coffee Day Take away (which owns 7000 Vending Machines), Coffee Day Exports and Coffee Day Perfect (FMCG Packaged Coffee) division.
Enthused by the success of offering a world-class coffee experience, the company has opened a cafe in Vienna, Austria, and is planning to open more cafes in West Asia, Eastern Europe, Eurasia, Egypt and South East Asia in the coming months.
The fresh infusion of funds to the tune of $55 million is being termed by company insiders as "moving into the fifth gear of its expansion plans."
If Sequoia Capital's investment in Cafe Coffee Day comes through, it will be its first relatively big-ticket investment after its merger with WestBridge Capital.
Sequoia Capital has also announced that it is raising $400 million worth of funds to be invested in India over three years. Its present corpus is $350 million.
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