Ahead Of IPO, FirstCry’s Early Investors Look To Sell Stake

SUMMARY

FirstCry’s early investors such as Chiratae Ventures, Vertex Ventures and Elevation Capital could sell their stake in the company for $180 Mn in a secondary transaction

The fundraise is expected to value BrainBees Solutions, FirstCry’s parent company, at around $2.1 Bn

In the fiscal year ending March 31, 2020, FirstCry saw its revenue increase by 68%, from INR 535 Cr in the fiscal year 2018-19 (FY19) to INR 897 Cr in FY20

FirstCry’s early investors such as Chiratae Ventures, Vertex Ventures and Elevation Capital (formerly SAIF Partners) are reportedly looking to sell about 7%-9% of their individual stakes in the company for $180 Mn in a secondary transaction. The fundraise is expected to value BrainBees Solutions, FirstCry’s parent company, at around $2.1 Bn, almost double of its previous funding round.

Founded in 2010 by Supam Maheshwari and Amitava Saha, Pune-based FirstCry offers different categories of baby and kids products from clothing to other essentials. The company has expanded its user base to over 4 Mn and has a retail footprint of over 300 stores spread across 125 cities. It claims to offer 2 Lakh baby and kids products across 2,000 brands.

In February 2020, FirstCry raised $296 Mn (INR 2120 Cr) in Series E funding from Softbank Vision Fund to enter the unicorn club. The investment is believed to be the first tranche of the total $400 Mn funding which has been committed by Softbank, according to the company’s filings with the ministry of corporate affairs. As per Crunchbase, FirstCry has raised $428.4 Mn in eight funding rounds till date.

According to ET, which first reported the development, the secondary round comes at a time when the omnichannel retailer is looking to realign its cap table before launching an initial public offering (IPO) in the next two-three years. In the fiscal year ending March 31, 2020, FirstCry saw its revenue increase by 68%, from INR 535 Cr in the fiscal year 2018-19 (FY19) to INR 897 Cr in FY20.

During the same period, the company saw its expenses fall by 26%, from INR 1,468 Cr in FY19 to INR 1,088 Cr in FY20. As a result, FirstCry has witnessed its net loss come down 83% from INR 933 Cr to INR 191 Cr.

In the online baby care segment, FirstCry competes with Hopscotch and Kids Stop Press. However, companies operating private labels such as MamaEarth have proven to be more successful in the segment.