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If the deal goes through, it could perhaps set the stage for NIIF to invest in other tech startups in the country.
The investment is through a secondary transaction estimated at around $150-$200 million, where some early investors are selling part of their stakes in the Pune-based omni-channel retailer that focuses on baby and mother care products.
The funding is expected to take place at a valuation of a little over $2 billion, the same as in March when TPG, ChrysCapital and Premji Invest
invested around $315 million in the firm.
“The current discussions are for around a $150-million deal, but it could get expanded up to $200 million,” one of the people briefed on the matter said.
This would take the total size of the ongoing round to around $450-$500 million.
“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,” another person aware of the talks added.
Japanese conglomerate SoftBank is the single largest shareholder in FirstCry with over 40% stake and that will come down once the round closes formally.
However, it will remain its single largest shareholder.
FirstCry founder Supam Maheshwari declined to comment.
A spokesperson for NIIF said: “As per NIIF policy, we do not comment on market speculation and information gathered from third-party sources.”
NIIF manages capital commitments of over $4.5 billion across three funds — Master Fund, Fund of Funds and Strategic Opportunities Fund.
In April, it made its first investment in the Indian healthcare sector by putting around $300 million in Manipal Hospitals, one of the largest multi-speciality healthcare providers in the country.
FirstCry is also looking at a potential initial public offering (IPO) in the next 12-18 months.
The company also has a logistics arm – Xpresbees — which was spun out in 2015.
It continues to see steady demand on its platform though consumption has taken a hit due to the second Covid-19 wave.
“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,” a person close to the company said.
During its $300 million investment in March, investors like Elevation Capital (formerly known as SAIF Partners), Vertex Partners and MegaDelta Capital Advisors sold their entire stakes.
FirstCry, founded in September 2010, had acquired BabyOye from Mahindra Retail in an all-stock deal worth around $50 million in 2015. Its other investors include Mahindra Group, Valiant Capital, Ratan Tata and Kris Gopalakrishnan.
FirstCry has over 300 stores across 125 cities. It has a user base of more than 4 million and offers more than 200,000 baby and children’s products from 2,000 brands. It competes with Hopscotch and Kids Stop Press in the online segment.