Indonesian coffee chain raises US$109m; Eduardo Saverin to join board

INDONESIAN coffee retail chain Kopi Kenangan has raised US$109 million in a Series B funding led by its existing backer, Sequoia Capital, the company announced on Tuesday. 

The round was also joined by new investors B Capital, the venture capital firm co-founded by Eduardo Saverin; Hong Kong-based Horizons Ventures, consumer-business investor Verlinvest, family office Kunlun, Belgian investment firm Sofina and Indonesia's Alpha JWC Ventures. 

Mr Saverin, famously known as a co-founder of Facebook, will join Kopi Kenangan's board of directors to "build a global brand celebrating Indonesian and South-east Asian flavors". 

Founded in 2017, Kopi Kenangan aims to provide a mid-market option between high-end international coffee and instant coffee sold at Indonesia's street stalls. It has 324 stores across the country and plans to hit 500 stores by the end of this year. 

The company, which employs about 3,000 staff, touts itself as a "new retail" business. Customers can make their orders via an app and collect it at a physical store or have it delivered, similar to China's Luckin Coffee. 

Kopi Kenangan's sizeable raise could be a sign of continued investor bullishness about the coffee business even after Luckin Coffee's accounting scandal, as well as macroeconomic pressures amid Covid-19. 

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Kopi Kenangan plans to expand to Thailand, the Philippines and Malaysia after the Covid-19 pandemic. For now, it plans to use the fresh capital to grow its operations in Indonesia, launch new products and invest in technology and resources to protect employees' well-being amid Covid-19. 

Commenting on the impact of Covid-19, Kopi Kenangan chief executive Edward Tirtanata said: "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."

Kopi Kenangan previously raised US$20 million in Series A funds in June 2019, also led by Sequoia Capital. Six months later, it raised more Series A funds from pop star Jay-Z's venture fund Arrive, basketball player Caris LeVert, and Sweetgreen chief executive Jonathan Neman and tennis star Serena Williams' venture firm Serena Ventures. 

The company raised US$8 million in seed funding back in 2018 from Alpha JWC Ventures. 

Rohit Agarwal, vice-president of Sequoia Capital (India) Singapore, said: "F&B is one of the largest consumer opportunities in South-east Asia and Kopi Kenangan has built a very authentic and compelling identity among millions of Indonesians."