We found this charming place on one of our scooter adventures. It's definitely worth coming here for a coffee, drink and snack. The owners are Venezuelan and super nice. The tiny bar has an epic view and the place gives you a good feeling of life on Madeira is for the locals.
To go there you should take the old road from Funchal and preferrably on a scooter like we did.
Watch our video from there: https://youtu.be/zd5IzIxrqco?t=420