FirstCry acquires Mahindra's BabyOye for Rs.362.1 crore
Online baby care portal FirstCry acquired Mahindra Group's e-commerce website for kids' products, BabyOye. The deal, worth Rs.362.1 crore, will consist of both cash and stock components. A filing with the Bombay Stock Exchange (BSE) states that the deal will see an equity component amounting to about Rs.354.6 crore and around Rs.7.5 crore in terms of cash. Other transaction details were not announced.
FirstCry was launched as a platform retailing in baby and kids products, while also catering to to-be moms. The company was launched as a start-up in 2010 by Supam Maheshwari, who currently serves as the CEO. With popular brands such as Mattel, Ben10, Barbie and Fisher Price, the company has grown to include over 700 brands retailing under its online stores.
BabyOye was launched in 2014 by Sanjay Nadkarni and Arunima Singhdeo, backed by Tiger Global, Accel Partners and Helion Venture Partners. The company was owned by Mumbai-based Nest Childcare Services, and since its launch, has seen stiff competition from larger players like Flipkart and Amazon. The company closed its 2014 financial year with losses amounting to Rs.15.14 crore.
Mahindra acquires BabyOye
Early last year, one of India's largest conglomerate, Mahindra Group acquired BabyOye's Nest Childcare Services. Anand Mahindra, the Chairman of Mahindra Group, announced their deal with the e-commerce website on social network. Mahindra Group was pitched to run one of the country's largest offline store chain, Mom & Me. The company faced increasing rivalry from FirstCry, touted to be the market leader.
Consolidation to help pitch companies as market leaders
"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 Anand Mahindra.
How will the deal help FirstCry?
Although FirstCry has around 180 offline stores under its belt, the acquisition will see the company obtain another 120 BabyOye stores. Operating in a niche vertical space, the deal will help FirstCry gain a better foothold in the business to compete against larger players like Flipkart. The company has also raised fresh equity capital of $34 million from Mahindra Group and other investors.
FirstCry's consumer base after the deal
After the deal with Mahindra Group, the company will gain access to a parent base of around 4 million. It will also boost their footprint to over 300 stores across a whopping 125 cities.