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FirstCry acquires BabyOye for $54 million, also raises $34 million funding round

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BrainBees Solutions Pvt. Ltd, which runs online and offline stores of baby care products — FirstCry, has acquired the franchise division of Mahindra Retail Pvt. Ltd, which owns online babycare business BabyOye. The cash and stock deal is worth $54 million.

This acquisition is expected to help the company significantly expand its offline presence as well as strengthen its position as a leader in the babycare segment. The new entity will now work under the brand name FirstCry.com- A FirstCry Mahindra Venture.

The company’s filing to Bombay Stock Exchange on Saturday, has revealed that the deal will comprise an equity component worth Rs.354.6 crore and Rs.7.5 crore in cash. In a BSE filing, M&M said,

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.

Mahindra Retail has a strong offline footprint with more than 120 stores that are a combination of large format high street and Mall locations and hospital stores, operating under the ‘BabyOye by Mahindra’ brand.

Besides this acquisition, FirstCry has also raised $34 million in a fresh funding round from the Mahindra Group, Zurich-headquartered private equity fund Adveq, Infosys co-founder Kris Gopalakrishnan. Existing investors of the company IDG Ventures India, New Enterprise Associates, SAIF Partners, Temasek Holdings, Valiant Capital Partners and Vertex Ventures have also participated in this round.

Commenting on this, Anand Mahindra, chairman 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. We, at the Mahindra Group, are therefore delighted to join hands with an innovative brand like FirstCry and with its CEO Mr 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.

Pune-based FirstCry was launched in 2010 and is known for its omni-channel strategy with presence across desktop, mobile and offline routes offering baby and maternity products in India.

It has more than 150 FirstCry branded franchisee offline stores across 100 cities in the country. The company has over 90,000 items from 1,200 top International and Indian brands and claims to have 3 million customers.

So far, the company has raised $125 million from investors, making it by far the most funded company in the online babycare segment.

With this acquisition, FirstCry will now have a parent base of over 4 million, a footprint of over 300 stores spread across 125 cities, thereby becoming the go-to destination for worldclass brands and products in the mom, baby & kids vertical.

Supam Maheshwari, founder of FirstCry, said,

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.

Apart from selling maternity wear, nursery accessories, diapers, clothes for kids from brands such as Mattel, Ben10, Pigeon, Funskool, Hotwheels, Nuby, Farlin among others, FirstCry also owns a private label children’s apparel brand called BabyHug.

The Mahindra Group had acquired BabyOye in February 2015 for an undisclosed amount. Prior to acquisition, the company had raised about $15 million from Tiger Global Management, Accel partners and Helion Venture Partners. Soon after acquisition, the company renamed its flagship babycare stores called Mom and Me as BabyOye by Mahindra.

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