forbes  |  SEPTEMBER 22, 2014  |  By: Hunter Atkins

HOW TEABOX IS BRINGING SILICON VALLEY TO THE DARJEELING TEA FIELDS

From then on, Dugar had a knack for what he likes to call “disrupting the supply chain.” He makes himself sound like a natural born rebel of the business world. And perhaps that is befitting...

From then on, Dugar had a knack for what he likes to call “disrupting the supply chain.” He makes himself sound like a natural born rebel of the business world. And perhaps that is befitting in the case of his present venture, Teabox, an online teashop that he expects will revolutionize the centuries-old industry. “Tea production over the last 200 years has remained the same way,” says the 31-year-old Marwari from Siliguri, India, whose family has been in the industry for more than 50 years. “Everything is almost similar to what the British used when they started.” He gripes about antiquated paper logbooks, outdated machinery and the inefficient auction process. Then there are the dusty, austere working conditions. Were you to walk into any tea warehouse, he says, “you wouldn’t want to drink your tea anymore. The quality is not there. The infrastructure is not up to date. They are pretty much kept out in the open without basic hygienic care.” After spending years in Singapore as a financial analyst, Dugar returned home hell-bent on bringing a Silicon Valley attitude to the Darjeeling tea fields. “We are not running this as a tea company but as a tech company.” Tea tastes best when it is freshest. Typically, tea is plucked, sorted, housed, sent to auction, purchased, packaged and shipped to customers. It is a process that Dugar says is slowed down by “five to seven intermediaries before the tea reaches the end consumer.” It also takes between three and six months to reach customers overseas.

“The No. 1 enemy for a premium tea is its exposure to air and oxygen after production,” he explains. “So if you expose the tea open for a long period of time or you don’t bag it properly, within 20 to 30 days a tea will lose 50 to 60 percent of it’s aroma, it’s quality after production.” Teabox sources teas directly from plantations in Darjeeling, Assam and the Nilgiris. It vacuum packs the leaves within 48 hours of production. It ships directly from the processing warehouses to customers in 75 countries within three to fives days. This apparent efficiency earned Teabox seed capital in January of $1 million from Accel Partners, the investors behind Angry Birds, Dropbox and Spotify. The backing of venture capitalists has helped turn Dugar’s inspiration for an online tea store into perhaps India’s first global ecommerce company. Teabox’s website presents tea like wine (actually showing tea served in wine glasses). When selecting a tea, a customer can see the garden of origin, time of bloom and date of plucking as done by vineyards. There are steeping instructions and tasting notes. Patrons can “subscribe” to any number of the 53 tea profiles. Based on the purchasing history, Teabox uses algorithms to suggest other teas a consumer may like. Every shipment includes a sample of another tea. Dugar does not merely want to offer the best varietals. He hopes to introduce people to new ones and expand interest. “From a tech perspective,” Dugar says of Teabox’s personalized online experience, “we can convert a novice into an expert.” He claims that a suggested tea has “a 90 percent likelihood you will like it based on our data.” Dugar has bigger plans for Teabox. With the industry value estimated to be $40 billion, Dugar aims to nab 5 percent of the bounty. He plans to set up warehousing facilities in Europe to expedite the process even more. He also says Teabox is about to raise another round of funding: about $5-$10 million. This will help the company penetrate markets in Russia, China, Japan and Korea. If this model works for tea, Dugar wants to start selling spices and cereals. “The market is so big and we are not even scratching the surface right now,” he says. Of his new wave of investors, he adds, “They would not put money into the business if they don’t see the long-term profit.” .