Indonesian coffee startup Kopi Kenangan was founded by Edward Tirtanata and James Prananto in 2017. Tirtanata was already an established name in the country’s food and beverage industry through his first venture Lewis & Carroll, a premium tea house that also served coffee.
Seeing that his restaurant’s coffee beverages were popular with customers in Jakarta, he set out to start a business specializing in coffee, and Kopi Kenangan was born. One particular drink is a key item on the chain’s menu: iced milk coffee. Kopi Kenangan offered its own version of the popular beverage, and customers keep coming back for more.
Starting with just USD 16,900 and five fresh hires, Kopi Kenangan opened its first branch in an office building in the Indonesian capital and sold 700 cups of coffee on its first day. Within months, it started to turn a profit. This initial success drew the attention of—and an investment from—Alpha JWC, which wrote a check for USD 8 million in seed capital for the coffee chain in 2018.
Kopi Kenangan’s strategy shared many similarities with China’s scandal-hit Luckin Coffee. They’re both cheaper than Starbucks, take a technology-aided approach to handle orders, feature smaller storefronts, and have expanded rapidly in recent years. A typical Kopi Kenangan order comes out to around USD 1.35, far lower than USD 5 for a Starbucks latte. And customers like the chain’s drinks enough to provide repeat business.
One thing that sets Kopi Kenangan apart from Luckin is that it has already reached profitability. Luckin spent heavily on marketing and offered steep discounts to attract customers, but Kopi Kenangan did not go down that path. Instead, the Indonesian coffee chain focused its resources on developing and improving its beverage lineup. Because of its sound management, Kopi Kenangan was still able to draw USD 109 million in a Series B investment led by Sequoia Capital India during the COVID-19 pandemic.
Today, Kopi Kenangan has a valuation of around USD 500 million and has over a million customers on their app. With their recent funding, the chain has plans to expand beyond Indonesia to Malaysia, the Philippines, and Thailand when the pandemic subsides.
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