SoftBank-backed FirstCry in talks to sell stake in company at $3-bn valuation

SoftBank-backed FirstCry is in discussions with a set of sovereign funds to sell a stake in the company at a valuation of $3 billion. According to a report by Economic Times, these discussions started after discussions with private equity firm, Kedaara Capital, fell through a few months ago. 
 
People familiar with the matter also told ET that while the discussions are in the early stages, the funding is being primed as a pre-IPO round for the Pune-based company.
 
Around $100 million worth of secondary share sale is likely to be formalised, sources said. In addition, Masayoshi Son-led SoftBank which is the largest shareholder in the company is likely to sell part of its 29 per cent holdings if the deal happens. 
 
“Talks are ongoing for a few months, but the deal is yet to be finalised … Middle Eastern sovereigns and some pension funds may come on board in this secondary share sale,” said the source. “Deal contours can change as discussions move forward.”
 
FirstCry is an omnichannel marketplace for infant products. It is currently valued at $2.7 billion after the latest investment of $315 million led by Premji Investment last year. 
 
Premji Invest currently holds around 9-11 percent stake in the company, while other large shareholders include Mahindra Retail and US-based private equity firm TPG. They hold about 12-13 per cent and 5-6 per cent stakes respectively.
 
The company was supposed to file its draft red herring prospectus (DRHP) last year but deferred its IPO plans after market conditions went choppy. It joined a list of several start-ups such as boAt, Droom, Pharmeasy, Snapdeal who stalled their IPO plans in the wake of the global conditions. 
 
The only start-ups which are in the IPO race this year are personal care brand Mamaearth and travel tech company OYO.

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