FirstCry (BrainBees Solutions Pvt. Ltd) and Mahindra Retail (BabyOye), have consolidated their business activities. The new entity will now work under the brand name FirstCry.com- A FirstCry Mahindra Venture.
The move has been marked by Mahindra Retail selling its franchise business to FirstCry. It will now operate all company stores under a FirstCry master franchisee.
“A business transfer agreement has been executed by and between Mahindra Retail Pvt. Ltd (MRPL), a subsidiary of the company, Brainbees Solutions (FirstCry) and founder of FirstCry to transfer the franchise division of MRPL (BabyOye) as a going concern on a slump sale basis to FirstCry. The total lump sum consideration for the transfer of franchisee division on a slump sale basis is $54 Mn (INR 362.1 Cr), ” said the company in a BSE filing.
Mahindra Retail has a strong offline footprint with over 120 stores that are a combination of large format high street and mall locations and hospital stores, operating under the ‘BabyOye by Mahindra’ brand. Mahindra Retail had acquired BabyOye in 2015.
Supam Maheshwari, the founder of FirstCry will continue as the CEO of the combined entity.
Also, FirstCry has additionally raised $34 Mn of 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.
Anand Mahindra stated, “I believe that the future belongs to click and brick businesses, and that consolidation is the way to thrive and establish industry leadership. We, at the Mahindra Group, are therefore delighted to join hands with an innovative brand like FirstCry and with its CEO Supam Maheshwari. I am optimistic that this consolidation of the strengths that both groups bring to the partnership will result in a winning proposition. We are hugely excited by the possibilities.”
With this, FirstCry.com will have a parent base of over 4 Mn, a footprint of over 300 stores spread across 125 cities, thereby becoming the go-to destination for world-class brands and products in the mom, baby, and kids vertical.
The deal also allows FirstCry to increase its share of the parents’ wallets through its wider retail presence and collective merchandise of high-quality private label brands. Also, stakeholders can gain immensely from the combined merchandising and buying strength, as well as the ability to serve consumers of both brands.
As said by Supam, “Our endeavour has been to provide Indian parents with world-class brands and products, unparalleled customer service and convenience. FirstCry.com will help scale up the reach of this service and experience faster. Our partnership with the Mahindra Group will bring in synergies that will help us scale and achieve our profitability goal much faster. Together, we will continue to scout for more opportunities for inorganic growth.”
Based in Pune, FirstCry was launched in 2010 and is known for its omnichannel strategy with presence across desktop, mobile and offline routes offering baby and maternity products in India. It has over 150 FirstCry branded franchisee offline stores across 100 cities in the country. The company has over 90,000 items from 1200 top international and Indian brands and claims to have 3 Mn customers.
The startup has 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.
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