Indian Sovereign Fund NIIF To Buy Out FirstCry’s Existing Investors Stakes

SUMMARY

The transaction will be through the sale of secondary shares, where FirstCry’s existing investors will be selling a part of their shareholdings

FirstCry will be NIIF’s first bet in India's digital economy and could lead the sovereign fund to invest in more tech startups

FirstCry raised $13 Mn in an equity funding round from pi Ventures last month, at a valuation of $1.9 Bn

Pune-based kidswear ecommerce unicorn FirstCry is reportedly in talks with Indian sovereign wealth fund called National Investment and Infrastructure Fund (NIIF) to raise $150 Mn-$200 Mn. The transaction will be through the sale of secondary shares, where FirstCry’s existing investors will be selling a part of their shareholdings.

Notably, FirstCry’s early backers like Chiratae Ventures, Vertex Ventures and Elevation Capital (formerly SAIF Partners) are reportedly looking to sell about 7%-9% of their stakes in the company for $180 Mn (about INR 1,307 Cr) in secondary transition ahead of the company’s planned initial public offerings (IPO) in the next two-three years.

FirstCry will be NIIF’s first bet in India’s digital economy and could lead the sovereign fund to invest in more tech startups in the country. NIIF has three types of funds — Master Fund, Funds of Funds and Strategic Opportunities Fund (SOF).

Master Fund makes investments in the core infrastructure sector, Fund of Funds makes investments in equity funds to invest in healthcare, education, financial services, logistics and consumer services, and SOF invests in growth and development stage investments in companies and sectors that are strategically important to Indian economy.

NIIF is expected to value FirstCry a little of $2 Bn, an ET report highlighted. Inc42, in March 2021, exclusively reported that FirstCry raised $13 Mn in an equity funding round from pi Ventures through its opportunity fund I, at a valuation of $1.9 Bn or INR 14K Cr.

The company, founded in 2010 by Supam Maheshwari and Amitava Saha, offers different categories of baby and kids products from clothing to other essentials. It has expanded its user base to over 4 Mn and has a retail footprint of over 300 stores spread across 125 cities. The Pune-based startup claims to offer 200K baby and kids products across 2,000 brands.

Firstcry had entered the unicorn club last year, after raising $296 Mn (INR 2,120 Cr) in a Series E round from Japan-based Softbank’s Vision Fund in February 2020. The investment was the first tranche of a $400 Mn (INR 2,905 Cr) funding committed by Softbank. The remaining INR 703 Cr ($100 Mn) had been reserved by Softbank to be invested on the second anniversary of the transaction in January 2021.