Indonesian coffee startup Kopi Kenangan raises US$109mil Series B
By Digital News Asia May 12, 2020
- Funding to fuel expansion, tech investment and protecting employees amidst Covid-19
- Sees Facebook cofounder Eduardo Saverin joining its board of directors to help build brand
A good cup of coffee goes a long way. For Indonesia-based beverage retail Kopi Kenangan, it means a US$109 million Series B funding led by the company’s existing investor, Sequoia Capital. New investors include B Capital, Horizons Ventures, Verlinvest, Kunlun and Sofina, as well as the company’s first institutional investor Alpha JWC Ventures.
According to a press statement, Kopi Kenangan plans to use the newly-raised funds to strengthen its operations in Indonesia, on top of launching new products, investing in technology to better serve its customers, and protecting employees amid the COVID-19 pandemic.
"The hospitality industry is facing the biggest existential crisis of our generation," said Edward Tirtanata (pic below), cofounder and CEO of Kopi Kenangan, "It’s hard to tell when the sector will return to normal but when it does, it will look very different. As a growing startup, we are adapting quickly to the challenge through contactless commerce and uncompromising hygiene standards throughout our stores. The well-being of our employees is a big priority and we are investing in their safety, along with enhanced health benefits and additional training to help them cope with this massive change.”
“F&B is one of the largest consumer opportunities in Southeast Asia and Kopi Kenangan has built a very authentic and compelling identity among millions of Indonesians. We are looking forward to bringing the same delightful experience and tasty products in more categories and formats as the business expands into newer markets” says Rohit Agarwal, vice president, Sequoia Capital (India) Singapore.
Additionally, Kopi Kenangan has announced that Eduardo Saverin, one of the cofounders of Facebook, will be joining its board of directors. "I am looking forward to working closely with Kopi Kenangan and build a global brand celebrating Indonesian and Southeast Asian flavors," Eduardo says in a statement.
The new funding follows Kopi Kenangan’s US$20 million Series A round in June 2019, which was led by Sequoia Capital; and its seed round in 2018 led by local investor Alpha JWC. In December 2019, Kopi Kenangan also announced an expansion of its Series A round with additional investment from Arrive, a Roc Nation company; Serena Ventures; basketball player Caris LeVert and Sweetgreen CEO & cofounder Jonathan Neman, amongst others.
A taste for helping
The company has also reiterated its commitment to helping local F&B entrepreneurs with technology, investment and mentorship, provided through its food accelerator program Digitarasa. This is on top of Kopi Kenangan’s new training academy, which serves as a place for baristas and workers in the F&B sector to re-skill themselves in a changing landscape.
Founded in 2017, Kopi Kenangan filled a market gap between high-price coffee served at international coffee chains – which is often priced out of reach of most locals – and the instant coffee sold in the country’s many street stalls.
Customers enjoy their wide range of recipes that cater to local tastes, but some of their successes are tied to their ‘new retail’ model that merges the online and the offline. Customers are able to order through an app and having it delivered to their doorstep, or simply visit one of the many kiosks across the country.
Evolving the business from a coffee-centric, grab-and-go chain to include more Southeast Asian favourites didn’t hurt, either. Kopi Kenangan has dabbled in Boba, which became a top seller along with its own iconic favourites. Going forward, the company plans to offer a wider range of food and beverages from local merchants as well as its cloud kitchens.
Kopi Kenangan currently employs 3,000 people and hopes to create more jobs across cities and towns as it opens new stores. It expects to reach 500 stores by the end of 2020. Currently, Kopi Kenangan operates 324 stores across Indonesia and reaches over a million customers through its mobile app.
The company now plans to expand across neighbouring countries with stores in Thailand, Philippines, and Malaysia expected to open after the Covid-19 pandemic.