Firstcry acquires Mahindra’s baby care franchisee biz for Rs 362 Cr

Firstcry acquires Mahindra’s baby care franchisee biz for Rs 362 Cr

Online baby products seller Firstcry is acquiring Mahindra Retail, which runs offline stores under Babyoye brand, for about Rs 362 crore in a landmark deal in the Indian retail market.

The Pune-based startup, founded by serial entrepreneur Supam Maheshwari, will acquire the franchisee division of Mahindra Retail, part of the $18 billion software to automobiles congolmerates Mahindra & Mahindra.

The deal is a stock transaction, under which Firstcry owner Brainbees Solutions will issue shares worth Rs 355 crore to Mahindra Group and pay Rs 7.5 crore in cash. The deal will help Firstcry, which already has 180 franchisee stores, create one of the largest omni-channel retail plays in the country, with a strong presence both online and offline.

As a part of the transaction, Firstcry has also raised Rs 226 crore ($34 million) in fresh funding from Mahindra Group and Switzerland’s Adveq, besides existing backers like IDG Ventures India, SAIF Partners, NEA and Vertex. Infosys co-founder Kris Gopalakrishnan has also invested in Firstcry.

A statement said that Mahindra Retail will sell “its Franchise business to FirstCry, and operating all company stores under a FirstCry master franchisee agreement.” The combined entity will be called – A FirstCry Mahindra Venture with a network of 300 stores spread across 125 cities.

“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,” said group chairman and managing director Anand Mahindra in a statement.

Mahindra Retail had expanded into the online babycare market last year with acquisition of Babyoye, and also rebranded its offline stores from Mom & Me to the online brand. It has over 120 stores that are a combination of large format, high street and mall locations and hospital stores. In January 2016, Mahindra Retail also signed an agreement with well known global kidswear brand Carters.

“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 Maheshwari.


Lakshminarayana Yeluri

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