FirstClub in talks to raise $50 million from Peak XV, Sofina and others doubling valuation in under six months

Ayyappan R, founder and CEO, FirstClub

FirstClub is in advanced stages of raising $50-60 million (around Rs 450-550 crore) in a fresh round from Peak XV Partners, Sofina Ventures and others as the premium retail grocery startup looks to expand services to more cities and offer a wider assortment of products, people aware of the developments told Moneycontrol.

The entire amount will be in the form of primary capital and there are chances more investors join the round, these people added.

What is FirstClub’s valuation? 

The Bengaluru-based company is being valued at about $250 million (around Rs 2,250 crore) during ongoing negotiations, per sources. If a round materialises at that valuation, FirstClub would have more than doubled its worth, from around $120 million earlier, in a span of just six months, as businesses with a layer of quick commerce continue to be a favourite theme among venture capital investors.

To be sure, negotiations are still underway so the deal contours may change slightly as talks progress.

FirstClub, Peak XV Partners and Sofina Ventures did not immediately reply to Moneycontrol’s queries.

What will FirstClub use the funds for?

Once the funds are secured, FirstClub, founded and run by former Flipkart SVP Ayyappan R, will focus on expanding to top cities beyond Bengaluru and also get into more categories beyond fruits, vegetables (F&V) and other staples to push up average order values (AOVs) and increase revenue streams.

In about nine months since beginning full-scale operations, FirstClub has delivered over 1.2 million (12 lakh) orders and sold over 15 million units to more than 2 lakh people and has an AOV of around Rs 1,500.

“The company is growing at around 45 percent compounded monthly growth rate over the last two quarters,” Ayyappan R, founder and CEO, FirstClub had told reporters in a briefing on February 11.

Despite its premium positioning, FirstClub is seeing traction beyond affluent households, with a significant portion of orders coming from lower-rent communities and even paying guest accommodations — a sign of strong demand for clean-label groceries across segments, Ayyappan R had said in an interview earlier.

FirstClub will also look at opening up offline experiential centres in Bengaluru and other cities in the coming months.

The company has plans to expand to 35 stores within six months, covering all of Bengaluru’s pincodes, and add categories such as home, kids’ food, pet care and gifting. It is also experimenting with formats like subscription deliveries and cafés in dark stores serving food made from FirstClub’s own ingredients.