IPO-Bound FirstCry’s FY23 Loss Zooms Over 500% To INR 486 Cr

IPO-bound omnichannel retailer FirstCry’s net loss surged over 500% in the financial year ended March 31, 2023. The Mumbai-based startup posted a consolidated net loss of INR 486 Cr in the financial year 2022-23 (FY23), a 518% increase from INR 78.6 Cr in the previous fiscal year. 

It is pertinent to note that the startup had logged a net profit of INR 215.9 Cr in FY21. 

FirstCry’s consolidated financials include the financial performance of its 38 subsidiaries, including Globalbees.

Founded in 2010 by Supam Maheshwari and Amitava Saha, FirstCry is an omnichannel baby and kids marketplace. The startup converted into a public company last year, taking the first step in its journey to list on the bourses. 

Meanwhile, the startup’s sales crossed the INR 5,000 Cr mark during the year under review. Operating revenue rose 135% to INR 5,632.5 Cr in FY23 from INR 2,401.2 Cr in the previous fiscal year. It primarily earns revenue from the sale of baby care products.

Including other income, total income stood at INR 5,731.2 Cr in FY23, a jump of 127.7% from INR 2,516.9 Cr in FY22.

Where Did FirstCry Spend?

FirstCry reported a total expenditure of INR 6,315.6 Cr in FY23, an increase of 146% from INR 2,568 Cr in FY22.

Procurement Cost: Being an ecommerce marketplace, FirsCry’s biggest expense was its procurement cost. In FY23, the startup spent INR 3,953.3 Cr for restocking its shelf, a 150% increase from INR 1,572.1 Cr in FY22.

Employee Benefit Expenses: FirstCry spent INR 769.8 Cr to pay staff salaries, gratuity, PF and other employee welfare benefits, a 127% increase from INR 338.8 Cr in the previous year. The sharp increase suggests that the startup increased its headcount amid the layoff season. Interestingly, it spent INR 361.4 Cr on ESOPs, an increase of 292% from INR 92.1 Cr in FY22.

Transportation Cost: FirstCry saw a sharp increase in its transportation cost for the year under review. In FY23, the startup spent INR 429.2 Cr on transportation cost, a 604% increase from INR 61 Cr in the previous fiscal year.

Advertising Expenses: Advertising costs shot up 55% to INR 416.4 Cr in FY23 from INR 268.6 Cr in FY22.

FirstCry’s EBITDA margin deteriorated to -2.9% from 4.05% in FY22.

Maheshwari-led startup, which has raised over $700 Mn in multiple rounds till date and counts the likes of SoftBank, Chrys Capital, and Vertex Ventures among its backers, is likely to file its draft red herring prospectus (DRHP) by the end of the month.

As per media reports, FirstCry is looking to raise $500 Mn-$600 Mn from its IPO at a valuation of $4 Bn.

A few months back, three family investment offices – Manipal Group’s Ranjan Pai’s MEMG Family Office, Marico’s Harsh Mariwala’s investment office Sharrp Ventures, and the DSP family office of Hemendra Kothari – picked up stakes in the startup for about INR 435 Cr in a secondary round from SoftBank.