Specialty coffee brand First Coffee has raised $1.3 million in fresh funding, giving the company additional capital to expand its small-format, grab-and-go café network and enter more Indian cities.

The round was led by Japanese venture capital firm DG Daiwa Ventures, with participation from BEENEXT, Sanjay Kapoor, Shashank Bhagat and other angel investors. The investment also marks DG Daiwa Ventures’ first investment in India’s specialty coffee segment, adding a distinct strategic angle to the fundraise.

Founded by Sohrab Sitaram and Shiv Dhawan, First Coffee is building its café business around compact outlets rather than conventional large-format stores. The company focuses on locations where customers are more likely to prioritise speed and convenience, including high streets, malls, corporate parks and transit areas.

That operating format is central to First Coffee’s expansion strategy. Smaller stores allow the brand to work with less space than a traditional café while placing outlets in high-footfall areas where takeaway consumption can be a significant part of customer demand.

The model, however, also puts greater emphasis on execution. As the network expands, service speed, product consistency and location selection become increasingly important, particularly when customers are interacting with the brand through shorter, more transactional café visits.

Fresh capital to support expansion beyond existing markets

First Coffee has made a mark in Delhi, Punjab, and Haryana and is keen to leverage its new capital for expansion into more cities as well.

The funding will be deployed across store expansion, hiring, marketing and product development, giving the company resources to grow both its physical footprint and the operations supporting it.

The next phase could therefore test whether First Coffee’s compact format can be replicated across a broader range of Indian markets without losing the product and service consistency that becomes more difficult to maintain as a food and beverage network grows.

Rather than relying on large cafés designed for longer customer stays, First Coffee is positioning itself around shorter visits and accessible specialty beverages. The approach gives the company a different operating proposition as it competes for customers against international chains, established Indian café brands and independent coffee shops.

Gen Z and young professionals remain a key audience

First Coffee is also shaping its offering around Gen Z consumers and young working customers, combining specialty coffee with beverages suited to changing café preferences.

For First Coffee, that combination of product, format and location will be important as it moves beyond its initial regional presence.

Expansion alone will not determine the outcome. A larger network will also require the company to reproduce the same experience across stores, particularly when it comes to taste, service and the overall customer proposition.

A competitive café market awaits

The company is entering a market in which consumers have many options ranging from large chain cafés to local specialty shops and independent cafés.

First Coffee’s differentiation rests largely on its smaller outlets, quick-service approach and presence in high-traffic locations. Those characteristics could make expansion more flexible, but the longer-term challenge will be converting new visitors into repeat customers.

The $1.3 million infusion now gives First Coffee an opportunity to take its grab-and-go model into a wider set of locations while strengthening the teams, marketing and product development needed to support that growth.

For the brand, the fundraise is therefore about more than adding cafés. It represents a chance to see whether a compact specialty coffee format built around convenience can travel successfully beyond Delhi, Punjab and Haryana and establish a broader presence in India’s café market.

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