Firstcry may raise up to $150 million

India’s largest baby products retailer Firstcry is in talks to raise $100-150 million from new and existing investors as it seeks to increase its lead in the market, three people familiar with the matter said.

The Mahindra group-backed retailer has revived talks with Temasek and is also in talks with Chinese internet giant Tencent and a Chinese investment firm to raise its next round, one of the people said, requesting anonymity. Mint couldn’t ascertain the identity of the Chinese investment firm.

Firstcry held funding talks with Temasek last year but the discussions cooled because of differences over valuation. The companies revived talks this year. The firm has appointed Morgan Stanley as its investment bank for the deal.

Since its founding in 2010 by Supam Maheshwari and Amitava Saha, Firstcry (Brainbees Solutions Pvt. Ltd) has raised more than $100 million from Mahindra, IDG Ventures India, New Enterprise Associates, SAIF Partners, Vertex Ventures and others.

The Pune-based firm is one of the very few vertical e-commerce firms that has flourished in the past three years despite competition from Flipkart and Amazon India.

Unlike many e-commerce firms, Firstcry generates a significant part of its revenues from its network of more than 300 stores, although the offline business is smaller than its online side.

Most companies have struggled to expand in the babycare business that is still largely dominated by mom-and-pop stores. High real estate and customer acquisition costs have crippled the efforts of most babycare retailers to build large businesses.

Firstcry has gone further than others by using its online and offline channels to offer a wide assortment of low-priced products to customers.

THE FIRM HAS REVIVED TALKS WITH TEMASEK AND IS ALSO IN TALKS WITH CHINESE INTERNET GIANT TENCENT