FirstClub, a premium quick commerce startup, has raised $55 million in its Series B round of funding from investors led by Peak XV Partners and Sofina Ventures, the company’s top executive said. Existing investors Accel, RTP Global and Paramark Ventures doubled down in the new round.
The fresh infusion was only in primary capital, with no secondary transactions, and more than doubled the company’s valuation to $255 million from $120 million when it raised $23 million in its Series A round in September.
FirstClub is improving its supply chain infrastructure and expanding its product categories, betting that a meaningful slice of India’s urban households will pay a modest premium for curated, quality-verified groceries, positioning itself not as just a quick commerce player but as a high-quality retail platform.
“As retail evolves, people will not just be caring about, the speed and the price of what they order, but actually what they consume, which is the quality of the product,” company co-founder and chief executive officer Ayyappan R said in an interview with Mint.
The funding arrives as India’s quick commerce market matures and fragments simultaneously. While Zepto is headed to the public markets after receiving approval in May, others including Slikk are betting on being fashion-first quick commerce players.
The company is not necessarily positioning itself as a premium quick commerce player but, according to Ayyappan, more as a “high quality retail player.” The company doesn’t just deliver on demand but has also begun a subscription service for daily fresh grocery deliveries. Currently, it has 2,500 paying members in Bengaluru.
The largest share of the fresh capital will be directed at supply chain infrastructure. The company is building out its third, larger warehouse in Bengaluru. It has one warehouse in Hyderabad, a city it entered a few weeks ago.
Beyond physical infrastructure, the company plans to invest in cold-chain integrity, quality testing protocols and demand forecasting — processes that it expects will distinguish its model from conventional dark-store operators.
“Most of the investment is focused on maintaining quality across the supply chain right from sourcing into warehouses, through to the middle mile,” Ayyappan said.
While Bangalore has 21 ‘clubhouses,’ FirstClub’s name for dark stores, Hyderabad has three. In the next six months, the startup plans to open 50 such clubhouses across both cities.
New product offerings
The second major use of funds will be for category expansion. The startup, which received $8 million in seed funding in December 2024, started with fruits, vegetables and groceries. It has since added health and fitness, cleaning essentials and home and kitchen ware.
Currently, FirstClub has about 5,500 stock keeping units (SKUs), with groceries making up the majority at 4,000 SKUs.
“If we’re adding something, then we’re going to remove something as well,” Ayyappan said. “Our SKU expansion is going to happen on the back of category expansion.”
The company plans to enter the beauty and personal care segment and kids’ products in the coming weeks, which will roughly add 1,000-1,500 SKUs.
FirstClub runs its own private label, Member’s Pick, similar to Swiggy’s Noice and Zepto’s Relish and Daily Good. Even here, however, the startup remains selective, only moving into categories where it perceives large gaps. The company started its own brand of chocolates called MMMelt because it said there was a need for a chocolate without palm oil at affordable prices.
“We see that snacks, biscuits and cookies are areas which continue to have large gaps in the market,” said Ayyappan. “Fresh juice was one we had noticed and launched our label. Staples continues to see a huge gap.”
Order volumes
With the growth in quick commerce, average order volume (AOV) has become the metric that most experts monitor to track revenue and profitability. Redseer Strategy Consultants said in a report in February that AOV in quick commerce had grown about 5% year-on-year to ₹460.
“There is a visible increase in premium products such as supplements, protein powders, beauty products, personal care products and electronics, which is subsequently driving higher AOV. Premium categories carry gross margins significantly above the 15-20% typical of grocery staples,” said Praveen Govindu, a partner at Deloitte India.
Even though AOV has grown this year, experts said that a ₹700-800 range is a more viable benchmark for achieving sustainable profitability compared to the roughly ₹500 basket size.
FirstClub’s AOV was at ₹1,150 to ₹1,200, excluding electronics.
“It’s because the number of units people add to the order itself. People on an average add 10 to 11. In fact, during weekends it goes to 13 to 14, which, for any other platform, is only four to five,” said Ayyappan.