BrainBees Solutions, which owns online baby products retailer FirstCry, saw losses soar to $60.6 Mn (INR 393 Cr) in FY 2017, from $42.7 Mn(INR 277 Cr) in FY 16. The total revenue rose to $36.8 Mn (INR 239 Cr) for the period, from $26.6 Mn(INR 173 Cr) the year before, as per Registrar of Company (RoC) filings accessed by ET. Meanwhile logistics startup Rivigo posted a loss of $21.1 Mn (INR 137.1Cr) from a little over $770K (INR 5 Cr) in the previous year. Revenues however rose 170% to $61.9 Mn (INR 401.8 Cr) in 2016-17, from $22.9 Mn (INR 148.6 Cr) in the previous year.
As per the company’s filings, although there was a considerable increase in the turnover, FirstCry continued to incur losses on account of increased spending on marketing, employee benefits and other overhead costs.
Last October FirstCry also acquired BabyOye’s franchise business from Mahindra for $54 Mn and raised an additional $34 Mn new equity capital from the Mahindra Group, Adveq (a Large Pvt Equity Fund) and Kris Gopalakrishnan. The round also saw participation from all existing shareholders.
With the acquisition, Pune based FirstCry launched in 2010, expanded its parent base to over 4 Mn and a footprint of over 300 stores spread across 125 cities. Prior to the last round, the startup had raised $70 Mn to date and is backed by investors such as IDG Ventures India, SAIF, Valiant Capital, Vertex Venture, and NEA. In January 2016, Ratan Tata invested an undisclosed amount in FirstCry.
However losses continue to mount given the rising competition in the ecommerce industry from horizontal ecommerce players. Thus vertical ecommerce players like FirstCry will continue to face competition from horizontal ones and will have to keep pushing on brand recall, service as well as omni-channel strategies to beat them.
Rivigo: Losses, Revenue And Expenditure Rose In FY2017
For logistics startup Rivigo, while losses widened to $21.1 Mn, both revenues and expenditure rose. Total expenditure more than tripled to $80.97 Mn(INR 525.3 Cr) with other expenses also tripling to $59.87 Mn(INR 388.4 Cr). Finance costs increased 240% to $3.59 Mn (INR 23.3 Cr).