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Posted: Thu 29th Nov 2018
Rupesh and Alex Thomas appeared on Dragons' Den with Tuk Tuk Chai and secured a £100,000 investment from Peter Jones.
But after the show, the couple turned the money down and went on to raise more than £275,000 through crowdfunding. Here, Alex tells the story.
The idea came from Rupesh witnessing my obsession for authentic chai while we travelled in India, but realising that the only versions of chai available in the UK were inauthentic and did not taste like the real deal.
We also realised there was a demand for chai as chai lattes have become very trendy in large coffee chains.
In addition, whereas iced coffee is available from multiple brands there is no equivalent for milk tea, yet milk tea is the nation's favourite beverage.
We therefore realised there was a huge gap to create an entirely new category and launch the first ever ready-to-drink iced milk tea brewed with tea leaves.
Where do we start?! First of all, finding a factory that could brew tea with milk was a huge challenge. We eventually found the only factory in Europe capable of doing it.
Scaling up was the next challenge, as to get the same authentic taste of the chai when made on a large scale was extremely difficult. It took us two years and countless trials and errors to reach the perfect taste.
The sheer determination to launch the product that we believed in and we were certain customers would love kept us going.
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We launched at Sainsbury's and delivered our marketing activities with zero budget. Moreover, we needed to buy equipment for the factory to improve the production process and therefore increase profitability.
We saw Dragons' Den as a great opportunity to secure investment, receive useful feedback from successful businesspeople and at the same time increase the profile of the brand.
We mutually decided to part ways with Peter Jones as we needed more funds than £100,000 agreed on the Den.
What was not shown on TV was the discussion we had in the Den where we explained that we wanted to do crowdfunding as well to raise more funds and raise awareness of the brand. Deborah Meaden was very supportive of the idea and said it was a great way for us to build an army of brand ambassadors.
It was because she thought this was a better route for us rather than receiving traditional investment and so she didn't make an offer.
Peter made an offer on the premise that it would be an equal partnership. However, after meeting with his team, we realised that crowdfunding was still the best route for us. It paid off as we raised three times the amount offered on the Den.
Be very confident about your product and its USP. Getting picked up by big retailers is a real challenge so be prepared for people to say no.
It takes more than one conversation to get listed. Determination and persistence are key factors so never give up!
We're proud to have entrepreneurs like Alex and Rupesh as members in our amazing community of small business owners. Join today for the full range of member benefits!
