FirstCry buys Mahindra’s BabyOye for Rs362.1 crore
Move is expected to help FirstCry significantly expand its offline presence as well as strengthen its position as a leader in the babycare segment
Bengaluru: Online babycare store FirstCry (BrainBees Solutions Pvt. Ltd) has acquired the franchise division of Mahindra Retail Pvt. Ltd, a subsidiary of Mahindra and Mahindra Ltd, which owns online babycare business BabyOye for Rs.362.1 crore in a cash and stock deal, a move that is expected to help the company significantly expand its offline presence as well as strengthen its position as a leader in the babycare segment.
In a filing to the Bombay Stock Exchange on Saturday, Mahindra and Mahindra Ltd said the deal will comprise an equity component worth Rs.354.6 crore and Rs.7.5 crore in cash.
Besides, FirstCry has also raised $34 million in a fresh fundraise from the Mahindra Group, Zurich-headquartered private equity fund Adveq, Infosys co-founder Kris Gopalakrishnan and existing investors IDG Ventures India, New Enterprise Associates, SAIF Partners, Temasek Holdings, Valiant Capital Partners and Vertex Ventures. FirstCry has so far raised $125 million from investors, according to venture capital database Crunchbase, making it by far the most well capitalised business in the online babycare segment.
“I believe that the future belongs to click and brick businesses, and that consolidation is the way to thrive and establish industry leadership. 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,” Anand Mahindra, chairman and managing director of the Mahindra Group, said in a statement.
To be sure, the Mahindra Group had acquired BabyOye, which had raised about $15 million from Tiger Global Management, Accel partners and Helion Venture Partners, for an undisclosed amount in February 2015. Later last year, the company renamed its flagship babycare stores called Mom and Me as BabyOye by Mahindra.
FirstCry, which was founded by Supam Maheshwari in 2010, follows an omni-channel strategy and operates about 180 brick and mortar stores, while the Mahindra Group operates about 120 stores under the BabyOye brand. Post the merger, the combined entity will be called FirstCry.com-A FirstCry Mahindra Venture, and will have its footprint across 300 physical stores in 125 cities.
“We are delighted to partner with a prestigious business house like Mahindra, both as a retail brand and as an investor. FirstCry.com has been at the heart of organising the huge baby and kids market in India. 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,” Maheshwari said in a statement.
FirstCry not only sells maternity wear, nursery accessories, diapers, clothes for kids from brands such as Mattel, Ben10, Pigeon, Funskool, Hotwheels, Nuby, Farlin among others, but also owns a private label children’s apparel brand called BabyHug.
FirstCry also owns a logistics business, which competes with third-party logistics companies such as Delhivery and Ecom Express among others. The company had launched a logistics business in 2012 and spun it off into a separate entity called Busybees Logistics Solutions in September 2015. The company raised Rs.85 crore separately for the logistics business in February 2016 from existing investors.