First Coffee Raises $1.3M as DG Daiwa Ventures Makes Its First India Specialty Coffee Bet

First Coffee Raises $1.3M as DG Daiwa Ventures Makes Its First India Specialty Coffee Bet

Specialty coffee brand First Coffee has raised $1.3 million in fresh funding as the company looks 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.

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 such as high streets, malls, corporate parks and transit areas, where customers are more likely to prioritise convenience and speed.

The small-format model allows First Coffee to operate with a smaller physical footprint than traditional cafés while targeting high-footfall locations. The company is positioning its stores around quick-service consumption, with specialty beverages aimed at customers looking for convenient coffee options.

This operating model also places greater importance on location selection, service speed and consistency. As First Coffee expands its network, maintaining product quality and customer experience across multiple outlets will become increasingly important.

First Coffee currently has a presence across Delhi, Punjab and Haryana and plans to use the new funding to expand into additional Indian cities.

The fresh capital will be deployed across store expansion, hiring, marketing and product development. The funding gives the company resources to increase its physical footprint while also building the teams and product capabilities needed to support a larger network.

The company is also targeting Gen Z consumers and young working professionals, with its offering built around specialty coffee and beverages suited to changing café preferences.

Rather than competing primarily through large cafés designed for longer customer stays, First Coffee is focusing on smaller outlets and a grab-and-go experience. Its locations are intended to serve customers who want specialty beverages while spending less time inside the café.

The Indian specialty coffee market is becoming increasingly competitive, with international chains, established domestic brands and independent specialty cafés competing for a growing base of younger consumers.

For First Coffee, its differentiation lies in combining specialty coffee with a compact store format and high-traffic locations. The approach could allow the company to expand with a different cost and operating structure compared with traditional café formats.

However, scaling a café network across different markets brings its own challenges. Product consistency, service quality, location economics and repeat customer behaviour will become increasingly important as the company expands beyond its existing markets.

The latest $1.3 million funding provides First Coffee with capital to accelerate that expansion while investing in hiring, marketing and product development.

For the company, the next phase will be about proving whether its small-format specialty coffee model can be replicated across more Indian cities while maintaining the convenience, product quality and customer experience that underpin the brand.