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NIIF Shelves Plan To Invest In IPO-Bound FirstCry

NIIF Shelves Plan To Invest In IPO-Bound FirstCry

VC firm PremjiInvest is expected to step in and buy the stake, according to a report

NIIF pulls the plug barely a couple of months after CCI nod for NIIF to invest in kids marketplace FirstCry.

Move comes as FirstCry preps for the upcoming IPO, which is reportedl;ylined up at the end of the year

The National Investment & Infrastructure Fund (NIIF) has pulled the plug on its proposed investment in the online baby marketplace, FirstCry.

The revelations came to fore in a Bloomberg report that quoted people familiar with the matter.

Meanwhile, VC firm PremjiInvest is expected to step in and buy the stake, the report added. 

This comes barely a couple of months after NIIF and PremiInvest had received CCI green-signal to pick up a stake in FirstCry. Inc42 had earlier reported that the country’s sovereign fund was expected to pump in $100 Mn in the Supam Maheshwari-led marketplace. 

As part of the defunct deal, SoftBank and other existing investors were supposed to dilute their shareholding to make way for NIIF.

FirstCry was founded in 2010 by Supam Maheshwari and Amitava Saha. The startup offers different categories of baby and kids products from clothing to other essentials. 

With a user base of 4 Mn+ and a retail footprint of over 300 stores, FirstCry is spread across 125 cities. The Pune-based unicorn claims to offer 200K baby and kids products across 2,000 brands.

Firstcry had entered the coveted unicorn club in February of 2020, after raising $296 Mn in Series E funding round led by SoftBank’s Vision Fund. The investment was said to be the first tranche of the total $400 Mn funding which has been committed by SoftBank. 

In total, FirstCry has so far raised $428.4 Mn in eight funding rounds till date. The startup is backed by marquee names including TPG, SoftBank Group Corp, ChrysCapital, among others.

Aspersions On Upcoming IPO?

The news of NIIF backing off from the deal comes at a time when the marketplace is preparing for its IPO. In February this year, the startup appointed Kotak Mahindra Capital and Morgan Stanley for its IPO. If media reports are to believed, FirstCry plans to list on Indian bourses by the end of this year itself.

A media report quoting sources had stated that, “The proposed IPO will be a combination of primary and secondary issue of shares and it may be the first pure play listing of its kind. It will provide a partial exit to the multiple investors.”

The ‘multiple investors’ likely refers to early backers including Vertex Ventures and Elevation Capital that may have sold about 7%-9% of their stakes. Other confirmed secondary stake-sellers include Chiratae Ventures and Newquest Capital Partners.

There is also no clarity yet on the size of the issue and would likely be a mix of primary share sale as well as offer for sale.

FirstCry will be the first startup in the space to go for an IPO. Earlier attempts by similar players like kids wear brands Gini & Jony and Lilliput have seen them fall flat on their face, with no result.

Additionally, the current market temperament has spooked investors and executives alike. This comes at a time of major upheaval as the ongoing US-Russia standoff over Ukraine and market corrections have left the tech market especially volatile. 

This has led to many Indian new age tech startups like OYO, PharmEasy and Delhivery deferring their plans to get listed on Indian bourses.

In the kids and infant category, FirstCry competes with a slew of brands, including Hopscotch, BabyMori, Shumee and Kids Stop Press among others. 

According to Statista, the kids wear segment was estimated to reach nearly INR 1.7 Tn in sales by 2028.