A consortium of private equity investors – ChrysCapital, TPG, and Premji Invest – has invested about $315 million in Firstcry, valuing the children’s retailer at about $1.9-$2.1 billion, three people with direct knowledge of the deal said.
The company is planning to target a public market listing in 18-24 months, they said. The deal includes a $300 million secondary transaction, they added.
There is also a small primary component of nearly $13 million from Premji Invest, regulatory filings revealed. ET reported about the impending transaction on January 8.
“All three private equity investors have roughly brought in $100 million each,” said a person with direct knowledge of the advancement.
The early investors in the SoftBank-backed company, such as Elevation Capital (formerly SAIF Partners), Vertex Partners, and MegaDelta Capital Advisors have sold their entire stakes as part of the recent transaction.
“The deal values the company at between $1.9 billion and $2.1 billion,” said another person familiar with the development.
The latest transaction has doubled the company’s valuation in less than 24 months — SoftBank Vision Fund had picked up 40% in FirstCry in 2019, valuing it at about $1.1 billion. The omnichannel retailer committed to baby and mother care products received $400 million in fresh equity from the Masayoshi Son-led fund as part of its Series E round.
“This round helps the company consolidate its investor base ahead of the IPO that it plans over the next 18-24 months,” another person added. When contacted, Supam Maheshwari, chief executive and co-founder of Firstcry, refused to comment.
Spokespersons for ChrysCapital, Premji Invest, TPG, Elevation Capital, MegaDelta, and Vertex did not respond to requests for comment.
Founded in September 2010, the company acquired BabyOye from Mahindra Retail in an all-stock deal worth Rs 362 crore ($50 million) in 2015. Its other investors include Mahindra Group, Valiant Capital, Ratan Tata, and Kris Gopalakrishnan.
With over 300 stores in 125 cities, Firstcry has grown its user base to more than 4 million customers and claims that it offers 200,000 baby and children’s products from 2,000 brands. It competes with Hopscotch and Kids Stop Press in the online segment.
In the financial year 2020, the Pune-based company’s revenue increased 68% to Rs 897 crore, enabling it to reduce net losses by 83% to Rs 191 crore. Expenses declined 26% to Rs 1,088 crore, company filings show.
Last year, most e-commerce operations had to significantly scale down operations in April-June due to the Covid-19 pandemic.
“The company is looking to expand its presence in the Middle East and looks to set up shop in markets such as Oman and Saudi Arabia,” said a person with direct knowledge of the company’s plans. It is already the biggest player in the segment in the UAE after setting up a business there in late 2019.
According to market and consumer data firm Statista, India’s apparel market is anticipated to grow 11% to $85 billion by 2021. The kidswear segment alone is expected to reach almost Rs 1.7 lakh crore by 2028.
All the incoming investors in Firstcry – TPG, ChrysCapital, and Premji Invest, have deep consumer and retail investment experience, having backed ventures as diverse as Nykaa, BookMyShow, W, Dream11, Lenskart, CavinKare, Myntra, and Future Lifestyle Fashions.