FirstClub, the 'quality-first' grocery delivery startup founded by a former Flipkart executive, has raised $55 million in a series B round led by Peak XV Partners and Sofina, more than doubling its valuation within a year of launch.
The round values the company at about $255 million, founder and chief executive Ayyappan R told ET. Existing investors Accel, RTP Global, and Paramark Ventures also participated in the financing.
FirstClub plans to use the fresh capital to enter new cities, strengthen its supply chain, and technology capabilities, and expand into categories such as beauty and personal care, home essentials and pet care.
Ayyappan said FirstClub was built deliberately against the grain of quick commerce, where most players have focussed on wider assortment, lower prices, and faster delivery.
“From day one, we were clear that we were building the antithesis of what retail has typically stood for: massive selection, lowest prices, and fastest delivery. We wanted to build a brand known for trust, quality, and value,” he said.
The company currently operates 24 dark stores, or what Firstclub calls clubhouses, including 21 in Bengaluru and three in Hyderabad. Ayyappan said FirstClub is already present in about 85% of high demand pin codes in Bengaluru and will continue to deepen coverage in the city while expanding into Hyderabad. It is also evaluating a third city over the next 30-60 days.
“We will continue to scale Bengaluru itself. There is still a lot of headroom for us to grow in there,” he said.
FirstClub does not disclose order volumes or GMV (gross merchandise value), but Ayyappan said the company is doubling order volumes every three months. Its gross average order value is about Rs 1,200, which he said is around 2.5 times the industry average.
“Our higher order value is not because our products are more expensive. It is because customers are ordering 10-11 items in a basket, compared with around four on other platforms,” he said.
Ayyappan pushed back against the idea that FirstClub is a premium grocery platform, saying its bet is on quality.
“It is a misconception that this is a premium play. It is a play on high quality, which need not be accessible only to certain consumers,” he said.
The startup says it has banned over 200 ingredients, including artificial preservatives, colours, growth hormones, and antibiotics on its platform. It also lab-tests products and uses quality checks such as Brix testing for fruits, before listing products on the app.
Ayyappan said the slower city expansion compared with other quick-commerce players is intentional, as the company needs tighter control over sourcing, testing, and supply chain quality.
“To establish a quality-led supply chain takes more time. If we dilute that, there is no difference between us and others,” he said.
He said the company is also trying to build unit economics into the model from the start, including through fewer stock keeping units (SKUs), higher order thresholds, larger baskets, and more order batching.
“You should not figure out after five or 10 years how to build a sustainable business. It should be part of how you build from day one,” Ayyappan said.
