Looks like acquisitions are trending in Indian online retail. And fashion commodities aren’t the only products flying off the virtual shelves! Baby products are a hot product in the online retail market too! The kids and baby products online platform FirstCry is doing pretty well. The etailer is close to profitability say reports. This niche portal is now looking at expanding its business and its prospects. To achieve that, the etailer acquired its competition Babyoye.
Firstcry acquires Mahindra Retail
Baby care store, FirstCry bought Mahindra Retail Pvt. Ltd. which is the franchise division of Mahindra and Mahindra Ltd. Mahindra Retail runs offline stores under the Babyoye brand. FirstCry acquired the company for around Rs. 362 crore in the Indian retail market.
The acquisition deal is a stock transaction. Brainbees Solutions, FirstCry’s owner, will pay Rs. 7.5 crores in cash and issue Rs. 355 crore worth shares to Manhindra group.
FirstCry raised fresh funding of Rs. 226 crore too as a part of the transaction. These funds were acquired from Mahindra Group, Switzerland Adveq apart from its existing backers, SAIF Partners, Kris Gopalakrishnan (Infosys founder), NEA, Vertex Ventures and IDG Ventures India.
How will the new entity function?
According to a statement, the merged entity will carry out business under the name Firstcry.com – A FirstCry Mahindra Venture. This will result in a combined presence of 300+ stores across 125 cities in the country.
Both FirstCry and Babyoye have their own offline and online outlets. FirstCry had 180 franchise stores under it before the acquisition. Under Babyoye, Mahindra has over 120 stores. With the addition of Babyoye stores under its brand, FirstCry will have the biggest omni-channel retail business in the country.
Anand Mahindra, the chairman of and managing director of the Mahindra group said, “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.”
It was only last year when Mahindra jumped into the online market for baby care goods by acquiring Babyoye. The group also rebranded its offline stores from Mom & Me onto the online platform. In January, the retailer signed an agreement with international kids wear giant Carters.
What does FirstCry have to say?
“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,” said Supam Maheshwari.