We came across this lovely little cafe/bar by chance late one sunny afternoon last week.

It is a tiny cafe but has tables and chairs across the road on the cliff, overlooking the sea. Lovely, local atmosphere; very reasonably priced drinks and food - delicious local Poncha. There was also jazz being played when we were there which added to the relaxed feeling.

We will definitely go back to this great little place when we are next in Funchal

Ideally situated on a corner with seating/tables across the road overlooking the sea and with an great but distant view of the harbour this little cafe is just the place to while away a few hours reading, talking or just taking in the sunshine.
If you are a resident of Quinta Bela sao Tiago come out of the hotel''s doors turn right then right again down a steep slope and the cafe is at the bottom of the hill on the left hand side.
The service is always excellent and friendly and the food is just right for a cafe of this size.
It's just a great little place!

you can get a wonderful coffee and pastal de nata at this little coffee shop/bar and the view from the little tables set across the street are fantastic. It is also a lot less for a coffee here then in the centre of Funchal and pleasanter

Nice small bar at the old town with direct view to the sea. Enjoyed sunset drinks for small money. sometimes live music. Not only tourists, mostly visited by locals.