FirstCry in talks to raise $75 million
In February, FirstCry had raised$26 million in Series D funding from Valiant Capital, IDG Ventures India, Vertex Ventures and SAIF Partners
Mumbai: FirstCry, the baby and maternity products e-commerce platform, is in talks with investors for a new round of funding that could see the company raise as much as $75 million, said three people aware of the development.
FirstCry stocks maternity wear, nursery accessories, diapers, clothes for kids till the age of nine, toys, school gear, prams, strollers and car seats, among other products. It claims to have more than 200,000 baby and kids products from 2,000-plus international and Indian brands like Mattel, Ben10, Pigeon, Funskool, Hotwheels, Nuby, Farlin, Medela, Pampers, Disney, Barbie, Gerber, FisherPrice, Mee Mee and others.
The move comes six months after FirstCry raised its last round of funding. In February, Brainbees Solutions Pvt. Ltd, the company that runs FirstCry, raised $26 million in funding in a Series D round from its existing investors, led by the US-based Valiant Capital Partners.
IDG Ventures India, Vertex Ventures and SAIF Partners, the other investors in the company, also participated in the round.
FirstCry has raised $95 million in capital so far from investors including IDG Ventures India, SAIF Partners, Vertex Ventures, Valiant Capital and NEA.
“They want to dominate the space and hence they are looking to raise a large cheque to help them build on their leadership position in the market,” said one of the three people cited above, requesting anonymity as the talks are private.
FirstCry competes with Babyoye, acquired by the Mahindra Group, and Hopscotch, which is backed by Facebook co-founder Eduardo Saverin, early-stage investor Velos Capital and LionRock Capital.
FirstCry has been witnessing strong inbound interest from investors, the first person said. “The company is close to achieving profitability and their burn is quite low. They should reach profitability in the next eight to 10 months,” he said, adding that the performance of the company is the main reason behind the inbound interest in the firm.
The idea behind the last funding round was to invest in expanding the company’s multiple channels—online, mobile and offline—and fund growth of its private-label business, the first person said, adding that the fresh capital will go towards similar purposes.
FirstCry, which started as an exclusive e-commerce platform, has in recent times evolved into a multi-channel retailer and is currently available on the web, mobile and offline, through franchised stores.
There are about 150 FirstCry-branded franchise stores across 85 cities in India. It also has distribution partnerships with over 5,000 hospitals.
In an interview with The Economic Times in January, Supam Maheswari, founder and chief executive officer of FirstCry, said that the company plans to significantly ramp up its store count from 150 to 700 over the next 3-4 years.
The latest round of fundraising could see some of its existing investors sell a part of their holding in the company, said a second person of the three cited above.
FirstCry is being advised by investment bank Avendus Capital, he added.
“The round will have both a primary and secondary share sale component. Depending on how much stake some of the existing investors decide to sell in the round, the size of the round could vary between $50 million and $75 million,” he said.
The company was founded by Maheshwari and Amitava Saha in 2010. Before starting FirstCry, Maheshwari had founded Brainvisa Technologies, learning solutions providers for enterprises, in 2000. Saha was also associated with Brainvisa in various capacities.
Emails sent to Maheswari and Saha on Friday remained unanswered. Valiant Capital, SAIF Partners, NEA and Avendus Capital too didn’t respond to emails seeking queries.
Sudhir Sethi, chairman and managing director at IDG Ventures, and Ben Mathias, managing director and India head at Vertex Ventures, declined comment.
To be sure, FirstCry is not the only e-commerce firm that is targeting growth through both online and offline channels.
TPG and World Bank’s International Finance Corp.-backed Lenskart Solutions Pvt. Ltd too has adopted an omni-channel approach, making eyewear available on desktop, mobile, hypermarkets, high streets, malls, hospitals and even at home.
Lenskart plans to open 1,000 brick-and-mortar shops through the franchise model, The Economic Times reported in February.
Amazon India has increased its offline shopping initiative to more than 1,000 outlets in an attempt to increase its reach in small towns, Mint reported in June.
Other e-commerce firms that are also taking the omni-channel route include online lingerie store Zivame and online furniture retailer Pepperfry.
“The essence is to have a combination approach that an entity can leverage and monetize more efficiently through the blend of online and brick-and-mortar stores, as a click-and-brick concept, so as to ensure a seamless consumer experience,” said Archana Khosla, co-founder of the Mumbai-based boutique law firm Vertices Partners.
“This can act as a driving catalyst as long as growth margins are given proper attention. There will probably be a lot more traction in this approach as long as one also factors in the lifecycle from a medium- to long-term perspective,” she added.