Private equity boss start-up Cofix Coffee: one dollar a cup has been listed backdoor

In Israel, where politicians have been trying for years to lower the cost of living, financier Avi Katz has done so, setting up the Cofix Cafe in Tel Aviv, the capital, where people can drink a cup of coffee for a dollar.

In 2011, thousands of Israelis took to the streets to protest that the cost of daily necessities such as food and houses was too high. The result: in 2013, the authorities promised to cut prices. But even if the government allows more goods to be imported to promote competition, the process is still slow. According to the central bank, food prices in Israel rose 39% between 2003 and 2014, far exceeding the overall price index.

Avi Katz, owner of private equity fund Hagshama (pictured below), launched the Cofix coffee and snack chain at the end of 2013, following the example of dollar shop (a chain that sells cheap goods at a price of $1 per unit), Reuters reported. There are already 80 stores in Israel, mainly in busy downtown neighborhoods, and plans to expand the number to 120 this year.

Avi Katz also joked about Israeli politicians: "people let politicians get elected and want them to change the country, but these new politicians are always disappointing, and then they come to Cofix for a drink."

Cofix's philosophy is simple: coffee and snacks such as sandwiches and open-ended pies each of 5 shekels ($1.30) can break even only if each store sells more than 1000 dollars a day. Before Cofix, the usual prices in Israeli coffee shops were $3 to $4 for coffee and $5 to $10 for sandwiches.

According to Avi Katz, food in Cofix stores is for takeout only, with daily sales of about 2000, with an average of only two kinds of food per customer. Such rapid success has led many stores to follow suit, forcing more chain stores to cut prices. "as long as it's a good idea, you can't avoid competition," he told Reuters. "

In mid-June, Cofix went public through Agri Invest through a backdoor listing and merged its operations. The company hopes to have sales of around 200 million shekels (330 million yuan) in 2015. The company's supermarket business, Super Cofix--, a mini-supermarket, sells items for no more than 5 shekels, and he plans to build three more this year. Avi Katz said that if the company had not invested in opening a supermarket last year, it would have made a profit last year.

Although the share price has risen 15 per cent in the past two sessions, the company's share price has fallen 7 per cent since its listing, suggesting that investors are still skeptical about whether the business model will work.

Avi Katz wants to expand its dollar coffee shop to London and Moscow, but it seems impossible now-a fake coffee shop called Caffix recently opened in London for a cup of coffee for a pound.

Source: Hua Lizhi

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