SUMMARY
SoftBank is looking to reduce its holding in FirstCry from 29% to less than 25%
This will be the third major secondary share sale at FirstCry if it goes through
FirstCry is also working on floating a $1 Bn IPO soon, with the company working to file its DRHP
Investors such as SoftBank and NewQuest Capital Partners, among others, are reportedly looking to sell shares in the IPO-bound ecommerce unicorn firstcry
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According to sources cited in an ET report, Japan’s SoftBank is looking to reduce its holding in FirstCry. Currently, the Masayoshi Son-led investor is the biggest investor, with a 29% stake in the ecommerce unicorn. It is looking to reduce its stake to less than 25%. This will be the third major secondary share sale at FirstCry if it goes through.
The deal might see the FirstCry’s total valuation rise to $4 Bn, up from $2.7 Bn in the previous secondary share sale earlier this year.
The Pune-based startup is apparently looking to gradually reduce its foreign ownership, bringing Indian private equity players to the cap table. The new investors will form a part of a round similar to a pre-IPO deal and FirstCry wants to bring domestic funds on board, according to the aforementioned report.
The sentiment was reflected by the February 2022 investment made by Premji Invest and National Investment & Infrastructure Fund (NIIF). The two Indian investors picked up shares worth around $100 Mn in the vertical ecommerce unicorn. The investment had come after Vertex Ventures, Elevation Capital, Chiratae Ventures and NewQuest Capital Partners offloaded shares last year.
FirstCry is also working on floating a public offer (IPO) soon, with the company planning to file its draft red herring prospectus (DRHP).
The IPO, worth $1 Bn, is likely to be floated in the coming year and the unicorn turned into a public company ahead of filing the DRHP with India’s Securities and Exchanges Board (SEBI).
FirstCry’s IPO plans were put on the shelf for an indefinite period in May 2022 after Indian public markets took a hit and new-age tech stocks took a beating during the same. Almost all of the 11 startup IPOs that were floated last year took a beating, with the exception of MapmyIndia.
The startup is currently reconsidering multiple aspects of the IPO, such as pricing and the issue size. Incidentally, FirstCry had increased its IPO size from around $700 Mn to $1 Bn, aiming at a valuation of around $6-7 Bn.
The ecommerce unicorn became one of the few ecommerce companies in India to actually be profitable. In fact, apart from Nykaa, FirstCry is the only profitable ecommerce unicorn.
Further, the Pune-based ecommerce player posted a profit after tax of INR 215.94 Cr in FY21, with total revenue soaring to INR 1,740 Cr. The ecommerce unicorn also saw two of its spinoffs – rollup ecommerce startup GlobalBees and logistics startup Xpressbees – turn unicorn in 2021.
