Startup Deep Dive : Subko Coffee — the cafe that opened three days before lockdown, now valued at Rs 287 crore

Subko Coffee opened its first cafe in a hard-to-find Bandra lane on 15 March 2020, three days before Mumbai shut every restaurant in the city for the pandemic. Six years later that same business is valued at Rs 286.92 crore ($34 million, as reported at the time of the round) and counts Zerodha’s Nikhil Kamath, Gauri Khan and John Abraham among its backers.

The contradiction sits in the pricing. Subko does not compete with India’s bigger coffee chains on price — it charges roughly 20-30% more than rival Blue Tokai for the same category of bean. It has built a business on the opposite bet: that design, packaging and a “subcontinent, not just India” story can carry a margin that coffee alone cannot. Whether that bet has actually paid off in the numbers is the rest of this piece.

Quick facts

What they do

Subko sells specialty coffee, craft-baked bread and viennoiserie, and “pod-to-bar” chocolate through its own cafes, a Shopify-run direct-to-consumer store, and wholesale supply to other retailers. The customer is the urban Indian who has already discovered filter coffee is not the only option — and is willing to pay a premium for beans it says are sourced and roasted with visible provenance, from the Bombay flagship to a new outpost in Dubai.

The origin

Rahul Reddy grew up in the United States and worked across development economics, technology and risk analysis before deciding, in December 2018, that none of it was the point. By February 2019 he had left those careers to apprentice at City of Saints, a specialty coffee roaster in Brooklyn. The insight he brought back to Mumbai was narrow but stubborn: Indian coffee culture had spent decades either imitating an Italian cafe or serving instant-coffee nostalgia, and no one had built a brand that treated “the subcontinent” — not just India — as source material worth exporting. The name Subko is a deliberate pun: a contraction of “sabko” (Hindi for “everyone”) fused with “subcontinent”. With designer Aniruddh Mehta drawing on vintage Bollywood typography and Daniel Trulson running the bakehouse, the founding team built a brand before they had proven a single day of revenue.

The struggle years

The first setback arrived before Subko had a chance to find customers. The cafe opened on 15 March 2020; the city went into lockdown three days later, and the roastery sat completely inoperable for a full month. The team could not even get essential-service passes to move two staff back into the roastery until the end of April. A second scare followed soon after: a COVID-19 death in the immediate neighbourhood forced another 14-day closure as a precaution, before the business finally relaunched on 8 June 2020 and, in its own account, did not stop again. Rather than wait out the crisis, Reddy pushed a direct-to-consumer pivot in the middle of the first wave, building a Shopify storefront and initially routing deliveries through local riders paid in cash on arrival — a deliberately clunky, capital-light workaround he later described as consciously burning runway on a bet he thought the brand needed to take.

The second struggle was less dramatic but more persistent: money. Revenue nearly doubled to Rs 13.57 crore in FY23 from Rs 7 crore in FY22, a 94% jump — but the net loss grew far faster, from Rs 1.7 crore to Rs 9.1-9.86 crore over the same year, as total expenditure rose 176% to Rs 23.4 crore. Growth, in other words, was outrunning the unit economics well before it was outrunning the market.

The turning point

The turning point was the Series B: Rs 85.10 crore (about $10 million) in March 2024, led by NKSquared — the investment vehicle backed by Zerodha co-founders — which put roughly Rs 70 crore into the round for about a 25% stake, at a post-money valuation of Rs 286.92 crore (about $34 million). The round also drew Blume Ventures, and, via a rights issue, existing backers including the Gauri Khan Family Trust and John and Priya Abraham. Before the round: a business confined to 12 outlets across three cities, still posting a widening loss on Rs 13.57 crore of FY23 revenue. After it: the capital funded new hires, product R&D, a push into ready-to-drink coffee and farm infrastructure — and, within two years, a fourth Indian city, a flagship “Craftery” concept store, and Subko’s first store outside India, a 5,000-plus square foot experience centre at Dubai’s Alserkal Avenue. By FY25, revenue had reached Rs 36.1 crore, up 28% on the prior year, on a headcount of about 227.

The money behind it

• Prior round: about $5.5 million (Rs 45 crore), reported, ahead of the Series B (Entrackr).
• Series B: Rs 85.10 crore (about $10 million), announced March 2024, led by NKSquared (Entrackr; Entrepreneur India).
• Post-money valuation: Rs 286.92 crore (about $34 million), reported, March 2024 — confirmed independently by two outlets (Entrackr; Entrepreneur India).
• Lead backer: NKSquared, the Zerodha co-founders’ investment vehicle, put in about Rs 70 crore for roughly a 25% stake — what it changed was access to serious growth capital and a name that de-risked the round for other investors.
• Other named backers: Blume Ventures and Blume Founders Fund (early institutional support); Gauri Khan Family Trust and John & Priya Abraham (repeat participants via rights issue, lending celebrity-led consumer visibility); Pallavi and Srinivas Dempo and Jay Mehta (existing angel backers who topped up).
• Reported angel roster also includes cricketer- and film-adjacent individual investors such as Tiger Shroff (Entrackr).

How it makes money

• Money in: company-run cafes and bakehouses (14 outlets as of September 2026 — 7 in Mumbai, 2 in Bengaluru, 1 in Hyderabad, 3 in Delhi, 1 in Dubai, per the company’s own locations page); a D2C Shopify store shipping coffee and chocolate to the UK, US and UAE; and domestic wholesale supply to other retailers (World Coffee Portal).
• Costs out, FY23: employee costs Rs 6.6 crore (up 154% year-on-year); raw materials Rs 3.8 crore (up 58%); rent more than doubled to Rs 2 crore — all growing faster than the category norm as the company added cities (World Coffee Portal).
• Where the margin sits: not in the bean. Subko prices roughly 20-30% above Blue Tokai for comparable specialty coffee, and the premium is defended through packaging design, retail-as-experience formats like The Craftery, and scarcity — bakehouse items that sell out daily push footfall and repeat visits beyond a single coffee transaction (Behind the Feature).
• The part people get wrong: this is not a coffee-quality premium so much as a brand and format premium. Coffee products alone made up about Rs 13.4 crore of the Rs 13.5 crore FY23 revenue, meaning the bakehouse and cacao lines — the parts that create the differentiated in-store experience — were still a small share of billed revenue even as they drove the visits (Inc42).

The numbers

• FY22 to FY23: revenue up 94%, but expenditure up 176% and net loss up more than 5x (Inc42; World Coffee Portal; Entrackr).
• FY24: as of January 2025, Subko had not yet filed its FY24 results — a normal lag under India’s MCA disclosure timeline, but one that leaves a gap in the trend line (Entrackr).
• FY25: revenue of Rs 36.1 crore, up 28% year-on-year, on a reported headcount of about 227 — but profit or loss for the year has not been made public (Inc42).
• For scale, direct rivals filed far larger numbers in the same period: Third Wave Coffee crossed Rs 240 crore revenue in FY24, and Blue Tokai posted Rs 216 crore in FY24 and Rs 325 crore in FY25 (Entrackr).

Where the money comes from

• By product, FY23: coffee products, about Rs 13.4 crore of Rs 13.5 crore total revenue — the overwhelming majority (Inc42).
• By format: cafe-bakehouse hybrids branded The Craftery (Mumbai and Bengaluru); standalone cafes such as Subko Lodhi Colony and Gully Labs in Delhi; and a single high-footfall airport counter at Navi Mumbai International Airport (company locations page, September 2026).
• By geography, current footprint: Mumbai (7 outlets), Delhi (3), Bengaluru (2), Hyderabad (1), and Dubai (1) — the company’s first market outside India (company locations page, September 2026).
• By channel beyond retail: domestic wholesale to third-party retailers, and a D2C export channel shipping to the UK, US and UAE (World Coffee Portal).
• The surprise: bread and chocolate are a minority of billed revenue but are central to why customers walk in — the bakehouse items are described as routinely selling out, which is a footfall driver rather than a line item (Baristamagazine; Dissect VC).

The risks

• Arabica cost exposure. Subko’s entire proposition rests on specialty Arabica, and Arabica futures surged about 70% through 2024 and touched over $4.30 per pound by February 2025 — the highest since 1977 — driven by supply concerns in Brazil and Vietnam. Analysts expected retail coffee prices to rise as much as 25% in response, a direct margin threat for a roaster that has not disclosed hedging (Perfect Daily Grind, February 2025).
• Scale disadvantage against better-funded rivals. Third Wave Coffee posted about Rs 240 crore in FY24 revenue and Blue Tokai moved from Rs 216 crore (FY24) to Rs 325 crore (FY25) — six to nine times Subko’s FY25 revenue of Rs 36.1 crore. Being smaller limits Subko’s buying power on beans, rent and logistics even as it competes for the same urban customer (Entrackr; Inc42).
• Losses have grown faster than revenue historically. Between FY22 and FY23, expenditure rose 176% against 94% revenue growth, pushing the net loss up more than 5x. Whether that ratio has since improved is not publicly known, because FY24 and FY25 profit/loss figures have not been disclosed (World Coffee Portal; Inc42).

The takeaway

Subko’s clearest lesson is not about coffee at all. It is that a genuinely difficult launch — a cafe that opened three days before a national lockdown — does not decide the outcome nearly as much as what a founder chooses to protect afterward. Reddy protected the brand’s design language and category-defying format even when a cheaper, faster path (aggregator delivery, a single hero product, a bigger city sooner) was available. That discipline is also the company’s biggest open question: a brand premium only survives as long as customers keep agreeing to pay it, and the numbers so far show revenue scaling well ahead of any public evidence that the losses have followed it down.

Frequently asked questions

What does Subko Coffee actually sell?

Specialty coffee, craft bakehouse products such as sourdough and viennoiserie, and pod-to-bar chocolate under the Subko Cacao line, sold through its own cafes, wholesale, and a direct-to-consumer online store.

Who founded Subko Coffee and when did it start?

Rahul Reddy founded Subko; the company was incorporated in 2019 and opened its first cafe in Bandra, Mumbai, on 15 March 2020, alongside bakehouse partner Daniel Trulson.

How much funding has Subko Coffee raised, and at what valuation?

Subko raised a Series B of Rs 85.10 crore (about $10 million) in March 2024, led by NKSquared, at a post-money valuation of Rs 286.92 crore (about $34 million), following an earlier round of about $5.5 million.

Currency converted at $1 = Rs 96.0, as of 18 September 2026 (Trading Economics).

Is Subko Coffee profitable?

No. The last publicly disclosed figure was a net loss of about Rs 9.1-9.86 crore in FY23, when expenditure was growing faster than revenue. FY24 and FY25 profit or loss have not been made public.

Where does Subko Coffee operate?

As of September 2026 it runs 14 outlets: seven in Mumbai, three in Delhi, two in Bengaluru, one in Hyderabad, and one in Dubai — its first location outside India, opened at Alserkal Avenue.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, March 2024 — “Update: Subko Coffee raises Rs 85 Cr led by NKSquared”
• Entrackr, January 2025 — “Blue Tokai posts Rs 216 Cr revenue with improved EBITDA margin in FY24” (notes Subko’s FY24 filing status)
• Entrackr — “Third Wave Coffee revenue crosses Rs 240 Cr in FY24, losses up 2X”
• Entrackr — “Blue Tokai posts Rs 325 Cr revenue in FY25, cuts losses by 21%”
• Inc42 — “Subko Coffee Posts INR 14 Cr Sales In FY23, Incurs INR 9 Cr Loss”
• Inc42, company profile (accessed September 2026) — inc42.com/company/subko-coffee/, FY25 revenue and headcount
• Inc42, funding profile (accessed September 2026) — inc42.com/company/subko-coffee/funding/
• World Coffee Portal — “Subko Coffee Roasters posts soaring annual sales but sees expansion costs mount”
• Entrepreneur India — “Subko Coffee Roasters Secures $10Mn in Series B Funding, led by NKSquared”
• Sprudge — “Build-Outs Of Coffee: Subko Specialty Coffee Roasters & Craft Bakehouse In Mumbai, India”
• The Established — “India’s coffee scene is coming of age…yet again”
• Dissect VC, March 2025 — “Subko Coffee: Brewing India’s Specialty Coffee Revolution”
• Keys to the Shop — “Founder Friday! w/ Rahul Reddy of Subko Coffee Mumbai, India”
• Behind the Feature (Substack) — “How Subko Charged 20-30% More Than Blue Tokai”
• Tea & Coffee Trade Journal, January 2026 — “Subko makes its global debut at Dubai’s Alserkal Avenue”
• Subko Coffee Roasters, company website — Locations page (accessed September 2026)
• Perfect Daily Grind, February 2025 — “Arabica futures are over US $4.30/lb: It’s a new era for coffee”

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