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Exclusive: India’s sovereign wealth fund may make a first digital bet with FirstCry

Recently, India’s sovereign wealth fund is looking to make its bet in the nation’s booming internet economy. 

The top discussions say that the NIIF (National Investment and Infrastructure Fund) thought to invest in SoftBank backed vertical e-commerce player First Cry. 

If the deal gets into action it might invest in other tech startups in the nation.  

The investment is via a secondary transaction estimated at around $150-$200 million, where some early investors are selling part of their stakes in the Pune-based retailer that focuses on baby and mother care products.

Reports suggest the funding is expected to take place at a valuation of a little over $2 billion. In March, the same happened when TPG, ChrysCapital, and Premji invested around $315 million in the company.  

This would take the overall size of the ongoing round to around $450 to $500 million, which is quite impressive. 

One of the spokesperson said- “There could be other new investors besides NIIF, too. Those talks are under way and it could be finalised in the next four to six weeks”. 

The single largest shareholder in FirstCry is SoftBank, a Japanese conglomerate with over 40% stake and that will come down once the round closes formally and with all needed ends. 

Moreover, the NIIF manages capital commitments of over $4.5 billion across three funds namely- Fund of Funds, Strategic Opportunities Fund, and Master Fund. 

The interesting part is First Cry is also looking for a potential initial public offering within the coming 12 to 19 months. 

Not only this, it has another holding in the logistics sector namely Xpresbees, which came out in 2015. 

With the global pandemic it saw a steady demand on its platform and it boosted due to the second covid-19 wave. 

One of the sources said- “The week of Eid was very good for them (FirstCry). There is an impact of the current wave obviously, but baby care products are very essential in nature and people continue to buy them online”. 

When the $300 million investment was made in March, the investing bodies namely Elevation Capital, Vertex Partners, and MegaDelta Capital Advisors sold their entire stakes. 

The company was founded in September 2010. It had acquired BabyOye from Mahindra Retail in an all-stock deal which was worth around $50 million in 2015. Its major investors are Mahindra Group, Valiant Capital, Ratan Tata, and Kris Gopalkrishnan. 

It has over 300 stores in around 125 cities. It has a user base of over 4 million and offers 200,000+ baby and children’s products from 2,000 brands. It competes with Hopscotch and Kids Stop Press in the online retail segment.

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