FirstCry, India’s leading omnichannel kidswear brand, plans to invest ₹146Cr in Globalbees Brands Private Limited, its ecommerce roll-up business. This investment will be made through subscription to preference shares over the next year. Globalbees operates as a brand aggregator, acquiring and scaling D2C brands across personal care, home care, fashion, and lifestyle segments. It competes with players like Mensa Brands, Upscalio, and Evenflow.
Additionally, FirstCry will invest ₹21 Cr in its wholly-owned foreign subsidiary, FirstCry Management DWC LLC, UAE, to expand in Saudi Arabia by setting up stores and warehouses.
Following the announcement, FirstCry’s shares dipped nearly 5% to an all-time low of ₹355.20 on the BSE. The move aligns with FirstCry’s broader strategy of diversifying into new consumer segments to boost profitability. In Q3 FY25, FirstCry reported revenue of ₹2,216.58 Cr, with ₹422.3 Cr from its roll-up business. The company also reduced its net loss by 70% year-on-year to ₹14.8 Cr in Q3.
1. About FirstCry: Business Model and Revenue Streams
1.1 Founders and Background
FirstCry, founded by Supam Maheshwari, has established itself as a leader in the baby and kids retail segment. Since its inception in 2010, it has grown into an omnichannel platform, catering to parents through both online and offline stores. Maheshwari, a serial entrepreneur, previously co-founded Brainvisa Technologies, an edtech venture later acquired by Indecomm Global.
1.2 Revenue Model
FirstCry operates a hybrid revenue model that includes direct online sales, offline franchise stores, and a marketplace for third-party brands. The company generates income through product sales, franchise fees, and advertisement revenue from brands looking to showcase their products to its vast customer base.
1.3 Funding and Growth
Over the years, FirstCry has attracted significant investments from SoftBank, Chiratae Ventures, and others. The company raised ₹4,194 Cr through its IPO last year. FirstCry has been expanding aggressively, leveraging its strong distribution network and brand loyalty.
2. Investment in Globalbees for D2C Expansion
2.1 Globalbees: The House of Brands Model
Globalbees, FirstCry’s subsidiary, follows a roll-up model similar to Thrasio in the US. It acquires, manages, and scales promising D2C brands across diverse categories such as personal care, home care, and fashion.
2.2 Competitive Landscape
The house of brands space in India is witnessing intense competition, with players like Mensa Brands, Evenflow, and Upscalio scaling aggressively. Globalbees competes directly with these players and also with category-specific aggregators like Nykaa in beauty, 10Club Homes in home decor, and TMRW in fashion.
2.3 Previous Investments by Globalbees
Globalbees has been actively acquiring and investing in brands. It recently increased its stake in Frootle and Wellspire, spending ₹106 Cr in two all-cash transactions. It also infused ₹8 Cr in The Butternut Co and acquired additional stakes in Solarista Renewables, the parent company of The Clownfish brand, for ₹5.88 Cr.
3. Investment in UAE for Middle East Expansion
3.1 FirstCry’s UAE Business Strategy
FirstCry will invest ₹21 Cr in FirstCry Management DWC LLC to strengthen its presence in Saudi Arabia. The investment will help set up retail stores and warehouses, expanding FirstCry’s operations in the Middle East.
3.2 Market Opportunity in Saudi Arabia
The kidswear and babycare segment in the Middle East is experiencing rapid growth due to increasing birth rates and rising disposable income. Saudi Arabia presents a lucrative market for FirstCry’s premium baby and kids’ products.
4. Financial Performance and Market Impact
4.1 Revenue Growth and Profitability Push
FirstCry reported ₹2,216.58 Cr in revenue in Q3 FY25, with ₹422.3 Cr coming from Globalbees. Despite its aggressive expansion, the company has successfully reduced its net loss by 70% YoY to ₹14.8 Cr.
4.2 Stock Market Reaction
Following the investment announcement, FirstCry’s shares fell nearly 5% during intraday trading, hitting a low of ₹355.20 on the BSE. Investors may be reacting to the high capital expenditure despite the company’s improving financials.
5. Learning for Startups and Entrepreneurs
5.1 Diversification Strategy
Startups should explore complementary sectors to scale their business. FirstCry’s entry into D2C brand aggregation and international retail highlights the importance of diversification for sustained growth.
5.2 Leveraging Funding for Strategic Expansion
Raising capital is not enough; using it for strategic investments like FirstCry is crucial. The company’s approach to deploying capital in acquisitions and geographic expansion is a strong lesson for emerging startups.
5.3 The Power of the Roll-Up Model
Globalbees’ roll-up strategy demonstrates how aggregating and scaling brands under one umbrella can drive significant revenue growth. New-age startups should explore similar aggregation models in their respective industries.
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