FirstClub, a member-only rapid delivery startup founded by former Flipkart senior vice president (SVP) Ayyappan R, has raised $8 million from Accel and RTP Global at a time when an increasing number of companies are looking to ride the quick commerce wave in India. Blume Founders Fund, Quiet Capital and 2am VC also participated in the round.
Ayyappan R’s former colleagues such as Flipkart co-founder Binny Bansal, Myntra co-founder Mukesh Bansal, Groww’s Lalit Keshre and Curefoods’ Ankit Nagori, who are all part of the Flipkart mafia also invested in the company along with Cred's Kunal Shah and others.
For Accel, FirstClub is the third quick commerce bet after Swiggy and Swish and for 2am VC, this is the second investment in the space after exposure to Zepto. The increased investments come at a time when several investors are looking to be part of the rapid delivery industry in India, thanks to a booming $6 billion market which is also projected to increase to a $40 billion opportunity by 2030, according to several analysts.
Zomato’s Blinkit, Swiggy Instamart, Zepto, Tata BigBasket, Flipkart Minutes and Swish along with others like Amazon preparing to join, the 10-minute delivery industry is already a crowded one. And Ayyappan R is aware.
“So far, existing players have focused either on very large selection, or on cheapest pricing or on fastest deliveries. The next level of evolution is going to be based on the quality of products that people are going to consume, which is where we will come in,” Ayyappan R told Moneycontrol in an interview.
FirstClub will initially sell packaged foods, fresh foods, bakery, dairy, nutrition and more to consumers who choose premium over mass-market. The company will only tap the top 10 percent of India’s population, largely the ones with an annual household income of over Rs 15 lakh, and who reside in the metro cities.
“These are the users, who will be willing to become FirstClub members, who don’t mind paying a 20-30 percent premium for products if they get fresh produce which are of the highest quality,” he said.
For the first 12 months, the company will only focus on Bengaluru and then slowly expand to Delhi and Mumbai. In the first year FirstClub will open a total of 10 dark stores and two offline stores that will double up as experience centres as the company aims to operate as an omnichannel business.
“FirstClub is…addressing the growing demand for premium products and services. By focusing on unparalleled quality, convenience and trust, Ayyappan and his team are redefining what modern retail can deliver,” said Barath Shankar Subramanian, Partner at Accel.
The company will also aim to deliver in under 30 minutes, instead of 10-minutes which seems to be the norm in quick commerce currently.
“With FirstClub, Ayyappan is pioneering a new approach to retail and we are excited to partner with him on this journey…as he crafts a business that directly addresses evolving consumer needs,” said Nishit Garg, Partner at RTP Global.
The launch of a premium offering also comes at a time when consumption has shown signs of slowing in India. From Nestle to Maruti Suzuki, multiple sectors have seen a slowdown in sales. Ayyappan R, who has 16 years of experience in retail including tenures at Cleatrip and Myntra, said the base of affluent people is only increasing.
“People are not spending because there is nothing new in the market, that is why savings have gone up. If tomorrow there is a new and exciting launch, I'm sure the demand will go up again. I am a firm believer that supply at the right price will create the demand. That has not happened yet,” Ayyappan R concluded.
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