A storm in a coffee cup at Third Wave Coffee

On the evening of December 12, 2023, employees at Bengaluru-based specialty coffee chain Third Wave Coffee Roasters panicked when the company announced internally that it was eliminating several positions.

The news was a bolt from the blue since the company had raised $35 million in funding just three months prior and was rapidly expanding its store count and entering new cities. The funding round was led by private equity firm Creagis and WestBridge Capital, which joined a cap table that already boasted prominent angel investors, including Udaan co-founder Sujeet Kumar, Unacademy’s Gaurav Munjal, and Zerodha’s Nikhil Kamath, among others. 

On the surface, Third Wave Coffee was in the ascendancy. “No one saw the layoffs coming. I remember we had a typical meeting about certain developments and what we needed to do as the retail chain was expanding. It felt like business as usual,” an employee in the company’s tech department who was affected by the layoffs told The CapTable.

“Suddenly, many [of us] started getting calls, and within two days, there were media reports suggesting the layoffs might affect 100-120 employees. Since this wasn’t performance-based, no one had a clue who would be retained and who would be let go. We had raised money just a few months ago and were expanding rapidly. I don't know what suddenly happened,” the employee said, requesting anonymity.