Third Wave Coffee; The Cafe Empire Redefining India's Cafe Culture – CoffeeTalk

Ayush Bathwal, a Qualcomm engineer and childhood best friend of Anirudh Sharma, founded Third Wave Coffee in Bangalore in 2015 after discovering the rich, roasted fragrance of coffee from railway vendors. The coffee culture awakening began in a San Diego coffee shop in 2013, where Bathwal discovered that coffee tasted like “guava and jasmine.” He was intrigued by the drone-baristas who spoke passionately about visiting farms, building schools in coffee growing regions, and how “some lot of your cup goes back to them.”

Sharman had taken over the running of ‘New Rajasthan Kalewalay’, a 50-year-old family restaurant chain, and shared dreams of opening a boutique hotel in Rajasthan someday. When Bathwal called from the US in 2015 to share his coffee epiphany, both friends were ready for change. They moved to Bangalore with combined savings of Rs 60 lakh and opened their first Third Wave Coffee in 2016.

Their central act was the brewing process, which was strategically positioned next to the window. India’s first in-store 5kg Diedrich roaster was strategically positioned next to the window, offering theatre to customers. Every single customer watched green beans that smelled like grass transform into roasted aromatics, while baristas explained single-origin characteristics, processing methods, and flavoring notes.

The daily routine was relentless, with Bathwal and Sharma waking up at 5:30 AM, buying bread from a nearby bakery basket, reaching the store by 6:30, and hand-everything from mopping floors to operating the roast machine. By their first anniversary, 200 regular customers showed up to celebrate, a community they’d nurtured around shared appreciation for quality coffee.

In 2017, the duo were joined by third co-founder Sushant Goel, an old friend from their boarding school days and an Northwestern University graduate who had turned down a job offer from consulting giant McKinsey to return to India in 2014 to build Clustr, a SaaS data analytics tool for SMBs. Goel would go on to serve as CEO at Third Wave until transitioning to a board member role in 2024.

In the meantime, the specialty segment has exploded, with well over 200 roasters operating across India, market growth 15% annually since 2016. Indian coffee consumption now grows at 10.15% annually versus global 2.5-3%, albeit from a lower base. Today, Third Wave operates 165 outlets across 22 cities, serving 7.1 million cups annually.

However, unit-level profitability remains as elusive as perfect crema: revenues have grown from $3.7m USD in FY22 to $23.6m USD in FY24, but losses have doubled to $12.7m USD. Premium real estate, equipment, imported from Europe, and skilled barista wages create overheads requiring massive transaction volumes to cover. Building both a coffee culture and a profitable empire demands time, but Third Wave Coffee is a testament to the power of brewing and community.

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