Having spotted an opportunity in Indonesia's competitive coffee-selling business, entrepreneur Edward Tirtanata is aiming for rapid expansion over the next few years.
Co-founder and group CEO of Southeast Asia's first food and beverage unicorn, Kopi Kenangan, said the privately held company is Indonesia's largest coffee chain, currently selling about 6 million cups a month. With revenue of $106 million in 2023, Tirtanata sees it growing 32% this year to $140 million and quadrupling to $430 million by 2028.
That's just one of his ambitious goals: He aims to expand into more countries (currently, the company only has international stores in Singapore and Malaysia) and wants to have 3,000 points of sale by 2028, up from about 1,000 now. Tirthanatha also aims to raise at least $100 million in pre-IPO funding by 2028 and go public by 2029.
Kopi Kenangan aims to expand into more countries, both through fully-owned stores and franchises under the name “Kenangan Coffee.” The company has partnered with Fredley Group of Companies as the franchise holder for the Philippines and plans to open stores there starting in October. It plans to have a fully-owned store in India early next year.
“The time has come to rise again to become the number one coffee chain in Southeast Asia,” Tirtanata, 35, told Forbes Asia in mid-August at his office in Menara Sentraya, South Jakarta.
Kopi Kenangan means “coffee memories” and the chain has built its brand value around the name. A survey by British market research firm YouGov this year found Kopi Kenangan to be Indonesia's most popular coffee chain, beating out Janji Jiwa, Starbucks and J.Co Donuts & Coffee.
The secret to Kenangan's success is its pricing: its most popular “Kopi Kenangan Mantang” is a palm sugar latte, priced at 22,000 rupiah ($1.40), somewhere between the 40,000 rupiah some cafes charge for premium coffee and the 5,000 rupiah charged by street vendors for coffee made with lower-quality beans.
“I want to let myself set the price, not the market.”
Kenangan can save on rent because 80% of his stores in Indonesia are takeaway-only and don't have seating, and Tirtanata says he eventually plans to have a 50-50 split between cafes and takeaway locations.
The eldest of three siblings, Tirtanata showed entrepreneurial spirit during high school, selling old Pokemon cards and Ragnarok robots. In 2007, he moved to the United States and studied finance and accounting at Northeastern University in Boston. As his parents said they were struggling financially, Tirtanata took more classes and graduated in two and a half years.
Back home, Tirtana helped his father set up a coal trading company in Kalimantan, but the company closed when coal prices collapsed in 2015. From that experience, Tirtana said that whatever business he now does, “I want to set the price myself, not the market.”
In 2015, he branched out into the ultra-premium tea chain under the brand Lewis & Carol. It got off to a rocky start with few customers in the first three months and he had to close four of his seven branches during the Covid-19 pandemic. But Tirtanata carried on.
He began discussing with his high school friend James Pranant about opening a takeaway coffee chain that could expand further. Tirtanata felt that drinking expensive coffee every day didn't make sense for most Indonesians, as it would cost the equivalent of a third of Jakarta's minimum wage. But offering “something affordable that people could actually drink every day” might have potential.
Kopi Kenangan Co-founder and Group CEO Edward Tirthanatha (third from left) and Co-founder and Chief Business Development Officer James Pranant (second from left) attend Kenangan Brands' 7th Anniversary Celebration on 27 August 2024.
Courtesy of Kopi Kenangan
In 2017, Tirthanatha, Pranant and Cynthia Chaerunisa invested Rp150 million to co-found Bumi Berka Boga, the company that operates Kopi Kenangan. Pranant, a 2019 Forbes 30 Under 30 alumnus, is chief business development officer and Chaerunisa is chief marketing officer.
Edward Tirthanatha, co-founder and group CEO of Kopi Kenangan;
Courtesy of Kopi Kenangan
In its first year, the company had just one Kopi Kenangan store. To expand, the company raised $8 million in seed funding from Indonesia-based venture capital firm Alpha JWC Ventures in 2018, and later exited with an internal rate of return of 150%.
From its inception to 2021, the company has raised over $230 million through funding rounds from multiple investors, including Peak XV Partners (formerly Sequoia India & Southeast Asia), Jay-Z's venture capital firm Arrive, Serena Williams' Serena Ventures, Singapore's GIC, Li Ka-shing's Horizons Ventures, and Eduardo Saverin's B Capital. Its latest funding round in December 2021 made the company Southeast Asia's first food and beverage unicorn startup.
Rohit Agarwal, managing director of Peak XV, says he realized that Tirtanata had a great instinct for a product that would please local palates when he reflected on his first meeting with Tirtanata in early 2019. “Ed showed up with four cups of coffee. It was a very unusual meeting. Instead of starting with a slide deck, the founder brought one cup of coffee. And he was like, let's put everything else aside and start with this coffee,” Agarwal says.
Agarwal is confident Kopi Kenangans can triple its store count and conduct an IPO by 2028. “I'm very supportive of it. In fact, I'm very excited about it. That's the goal from both a business and strategy perspective.”
When asked what the secret to their success is, Tirthanatha replied, “I think it really is grit. We have faced many crises and had to adapt and it has not been easy. It has never been easy. But if you forge the right path and persevere, I believe glory awaits in the end.”
