Inside At-Home Coffee Brand Sleepy Owl Coffee's ₹100 Cr Growth Journey
In a nation like India that loves
, drinking tea is a natural, everyday practice. But drinking coffee is often an out-of-home occasion, evokes deep conversations and sometimes leads to business ideas that fructify into cult offerings.
For Arman Sood, Ashwajeet Singh and Ajai Thandi, founders of the new-age coffee brand Sleepy Owl, the last one came true. Driven by their passion for the perfect brew, they left their corporate jobs and started crafting great-tasting coffees with custom flavours, designed for home consumption.
Set up in 2016, the Delhi-based challenger brand started production with a ready to drink, Cold Brew Box. Today, the VC-funded startup offers a diverse range that covers cold brew packets and hot brew bags, instant coffee, cold coffee cans, South Indian filter coffee, ground coffee varieties, coffee merchandise and recently launched protein Coffee (Profee) and RTD Matcha variants. About 55% of their revenue comes from dry coffee powder and the remaining 45% from other coffee-based beverages.
Sleepy Owl coffee is available in more than 15K retail stores, online marketplaces like Amazon and Flipkart, quick commerce platforms like Blinkit, Swiggy Instamart and Zepto, and its D2C website.
Before launching Sleepy Owl Coffee, Sood and Singh were hostel roommates, ran an ecommerce venture for some time and finished their law studies. Soon, Singh left his job and joined Sood in Mumbai, where they brainstormed startup ideas. Thandi, a friend of Singh and an investment banker, worked in New York then. Interestingly, all three were passionate about good coffee, but coffee chains like Starbucks were (and still are) too expensive.
Making an amazing cup of coffee at home was not easy, either. The readily available instant coffee brands lacked variety, and those looking for exotic brews spent a lot on beans and appliances. The trio saw the gap in the market and launched a wide variety of home brews, minus costly and complicated brewing setups.
But building a product-based startup based on the tenets of craft coffee was not a small task. The founders had to compete with legacy players, and the concept of startups as disruptors was still emerging. So, Sleepy Owl had to rise to prominence in three critical areas to cater to countless coffee enthusiasts across India.
Creating new coffee categories:
More importantly, the existing market was crowded, with brands like Nescafé (parent company is Nestlé), Bru (owned by Hindustan Unilever) and Tata Coffee calling the shots. Therefore, a new coffee brand offering familiar flavours would not be a cause for commotion.
Sleepy Owl created new categories to stand out, starting with an FSSAI-certified cold brew that had zero demand in India a decade ago. For context, a cold brew is all about steeping coarsely ground coffee beans in normal-to-cold water for an extended period (12-24 hours), which gives it a smooth, less acidic taste. However, educating customers about cold brew and the difference between instant and ground coffee was challenging.
“Many people were not familiar with cold brew. Hence, we did everything we could to help them understand the concept. We called our friends, did door-to-door campaigns and offered samples at food events. Gradually, our first 1K customers became our brand ambassadors and helped us grow,” explained Thandi.
It has an R&D team for product development, and all its coffees are carefully roasted in-house and in small batches to produce the right flavours. It also collaborates with external labs and experts to maintain the same quality standards for complex concoctions and does not use artificial flavours or preservatives. The startup’s flagship is cold brew, which includes flavours like mocha, cinnamon, hazelnut, caramel and more.
Procuring the best beans:
Sleepy Owl products are made from high-quality Arabica coffee beans sourced directly from single-origin, Grade A plantations located above 5,300 ft in and around Chikmagalur (Karnataka). However, the startup found it difficult to convince farmers and suppliers to sell top-quality ingredients in small quantities as big companies buy in bulk.
“Sourcing the ingredients and building a reliable supply chain were tough. But we persevered and formed deep ties with our suppliers. Once we had the products in place, the next challenge was learning how to sell them,” the founder added.
Going omnichannel:
The trio also prefers disruptive marketing instead of large-scale campaigns, taking part in F&B and corporate events where people can experience their beverages first-hand. “Our collaborations with the craft beer company Goa Brewing and the like for breakfast stouts and coffee-based gin have helped us build brand awareness in an engaging way,” he explained.
The startup has entered B2B partnerships and provides bulk orders, catering to hotels, restaurants, cafés, corporate houses and airlines. Currently, 65% of its revenue comes from online platforms and 35% from brick-and-mortar stores.
Of Innovative Road Map & Capital-Efficient ApproachSleepy Owl has countered many market diktats in a bid to emerge as India’s leading at-home coffee brand and grow sustainably. The pure-play FMCG brand has not limited its scope to online retail like many of its peers, although offline retail and B2B entry were far from easy. The reason: Businesses were sceptical about a niche brand, especially as some of its products had limited shelf life.
To add to its product line and fuel its growth, Sleepy Owl raised $8 Mn in venture capital from DSG Consumer Partners and Rukam Capital. Although funding infusions in craft coffee startups are nothing new, Thandi lauded the investors’ smart capital approach, a valuable combination of financial and strategic guidance.
“Many founders are trying to build consumer brands, but Sleepy Owl is one of the few to have built a strong one. The complementary skills of the founders and a clear understanding of their path right from the beginning made us invest in them,” said Archana Jahagirdar of Rukam Capital, a Delhi-based VC firm known for investing in early stage consumer brands.
“We regularly catch up with the founders as this is a competitive category and requires frequent brainstorming. Those with a deep understanding of brand building and product development, like the Sleepy Owl team, can always count on our support whenever they need an extra voice at the table to help them make decisions at critical junctures,” she added.
Where Is The New Crop Of Coffeepreneurs Headed?India has already entered the third coffee wave, the realm of speciality/craft coffee brought home by D2C players like Sleepy Owl, Country Bean and Araku Coffee, where single-estate/single-origin beans are roasted in small batches for custom tastes and flavours. According to Mintel research, coffee consumption is spreading among 56% of Indians, given their growing love for [South Indian] filter coffee and other iconic creations. Meanwhile, the ready-to-drink (RTD) coffee market is poised to reach $20 Bn by 2030 from $9.3 Bn in 2023, per aBlueWeave Consulting report.
For context, the RTD market covers a wide range of product categories, including instant coffees, roasted-and-ground beans and all sorts of speciality/artisanal coffees such as cold brew and nitro. The rise in the market size clearly indicates a growing demand for premium speciality coffees. Globally, the speciality coffee market is estimated to reach $76.9 Bn by 2033, at a CAGR of 11.8% from 2024 to 2033.
As the country’s consumption patterns evolve, Thandi foresees a preference shift from tea to coffee, paving the growth path for Sleepy Owl and its ilk. But here is an interesting observation.
Speciality coffee chain startups are now attracting PE/VC investments as they have added D2C and B2B layers to their core revenue stream. For instance, Blue Tokai Coffee raised $25 Mn in bridge funding from existing investors, including A91 Partners, Anicut Capital, Verlinvest, and 12 Flags in September 2025; Subko Coffee Roasters bagged $10 Mn, First Coffee raised $1.2 Mn in seed funding led by Beenext and abCoffee secured $3.4 Mn in a round led by Nexus Venture Partners.
The shift from out-of-home consumption to sophisticated at-home rituals is becoming a permanent fixture in the Indian market. This evolution is driven by challenger brands, which have successfully simplified premium coffee, replacing expensive machinery with convenient, high-quality formats. The path forward lies in sustaining this momentum through constant product innovation and a deeper penetration into the everyday grocery baskets of a transforming nation.
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