Indian Quick Commerce has become synonymous with 10 minute delivery and the hottest play for startups and investors, but FirstClub is taking a slower, more curated route. However, just three months after launching the app, the eight-month startup tripled its rating.
With a post-money valuation of $120 million, the Bengaluru-based startup raised $23 million in Series A rounds (including over 90% equity and remaining debt). The round also saw participation from the Blume Founders Fund, 2am VC, Paramark Ventures and Aditya Birla Ventures. The new funding comes just eight months after FirstClub raised a $8 million seed round in December at a $40 million valuation.
India’s e-commerce (the world’s second largest shopper base) is expected to reach $1700 billion by 2030, reaching around $600 billion a year, and is expected to grow to 18% per year, according to a recent Bain & Company report. Nearly one in India’s 10 retail dollars is expected to be spent online by the end of the decade. Over the past few months, the market has shifted from traditional e-commerce, which usually takes two or three days, to ultra-fast filling, driven primarily by the rise of quick commerce startups. The shift has encouraged incumbents such as Amazon and Walmart-owned Flipkart to join the fight with their own fast delivery offerings.
However, there is a gap in FirstClub. Rather than racing is the fastest, startups bet on quality. It targets the top 10% (approximately 20 million) of Indian households with premium products and curation experiences.
Launched in June, the startup is currently serving customers with four dark stores known as “clubhouses” to customers in several regions of Bengaluru. Dark Store is a fulfillment center that looks like a retail store, but only offers online ordering. The company stocks more than 4,000 curated stockholding units from the brand, including packaged food, fresh produce, bakeries, dairy products and nutrition.
“Based on data from the last three months, it’s clear that if consumers have a very differentiated choice, quality products, differentiated services, and very kinds of experiences they have on hand,” said Ayyappan R, founder and CEO of FirstClub, in an interview.
Currently, the startup is looking at the average order value (approximately $12) of the leading quick commerce platforms when delivering groceries.
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The founder ran with experience under his belt and hit the ground. Before establishing FirstClub in December, Ayyappan spent over a decade at Flipkart, India’s largest home e-commerce company, leading the team at its subsidiary Myntra (fashion e-commerce site) and Cleartrip (travel booking site). He previously was part of the team at Indian consumer goods giant ITC, focusing on strategies to expand the grocery market and outlet coverage. These experiences helped him quickly turn first clubs from concept to business.
“In the last six months, we were able to build an end-to-end technology platform,” he recalls.
The startups have also established their own supply chain networks and partner with Select Brands to provide exclusive products. Currently, 60% of products on the platform are exclusive.
“We’re not indexing at delivery speeds, but we say that the products here are not found anywhere else, whether offline or online,” Ayyappan told TechCrunch.
FirstClub also hired a third-party consumer panel to test the products featured on its platform.
“For example, to give a Paneere (Hindi cottage cheese), 20 products from paneeres from very different brands will be tested by this consumer panel, which is done as a blind test.
The startup began its journey with groceries as its first category. Competition is very intense in this area, and we found that most rapid commercial companies, including Blinkit and Swiggy’s Instamart, are offering food through the platform, but found there is a differentiated choice of premium quality items, Ayyappan said.
Freshly funded expansion plans
FirstClub aims to go beyond groceries and expand into new categories such as kids’ food, pet food, and dietary supplements. Ayyappan told TechCrunch that he will be trying out a cafe over the next 30 days. This has a differentiated approach that includes preheated foods, but includes items that are made in place.
The startup also plans to enter the home and general product category within the next six months. This includes home decor, home essentials, home care, furniture and even cooking utensils, the founder said.
FirstClub has a customer base of 70% women. As a result, the company not only curates products tailored to them, but also expands to categories that are most relevant to their needs.
Sharing more customer insights, Ayyappan told TechCrunch that FirstClub customers are primarily in the income bracket for annual household income of £1.5 million (approximately $17,000). The startup prevents customers from selecting the right customer by checking out whether their cart is worth less than £199 (about $2.40).
Additionally, the app is designed for browser-driven experiences rather than the search-driven experience typical of most quick commerce platforms. This approach encourages users to spend more time exploring options, improving retention, and enabling startups to deliver curated experiences based on customer insights. The startup also bans supply chain products that contain more than 200 ingredients that can harm consumers, the founder said.
“Everyone says, ‘I offer a wide selection and let consumers choose what they want,’ and the platform takes ownership. We say that every product we sell must be of the highest quality,” Ayyappan said.
FirstClub essentially wants to bring the experiences that retailers like Costco, Whole Foods, Trader Joe’s and TJ Maxx offer in North America.
“We want to attend consumers on multiple channels and multiple platforms,” he said. “It’s probably slotted streams, subscription streams, offline, so all of these will be featured in the photos.”
With the new funding, the startup is also planning to expand its clubhouse to up to 35, covering most of Bengaluru this year before entering the new city.
“We may invite consumers to the clubhouse to show that this is hygiene (they) and this is how we maintain quality,” Ayyappan says.
Currently, the startup has 185 employees, including 75 operational staff.
