FirstCry, recently in an RoC filing, revealed its figures for FY18. For the year, the company has significantly reduced its losses from Rs 393.24 crore to Rs 54.55 crore, while the revenue recorded 48.03 per cent growth from Rs 240 crore in FY17 to Rs 355.2 crore.
The 86.13 per cent reduction in losses follows a humble 35.24 per cent decrease in expenses from Rs 633.14 crore in the year ending March 2017 to Rs 410 crore in FY18.
It is interesting to note that the major dip in expenses was caused due to a cut in miscellaneous expenses. The figure went from Rs 311.62 crore to Rs 12.86 crore in a span of one year (2017-2018). This substantial development was supported by cutting the cost entailing Financial Liability measured at fair value.
While this figure stood at Rs 300.71 crore in FY17, the report for the year ending March 2018, does not show any such figure in Miscellaneous Expenses.
The reduction in losses is tremendous as compared to the slow growth in revenue and an insignificant cut in expenses. Going forward, it’s to be seen if this report will help the company score its much needed and awaited funding.
The reports show that no shares were issued during the session, and neither has there been any news of the company receiving a funding. The company planned to raise over $100 million from several investors including Temasek Holdings about a year ago and the plan reportedly revived again, but no talks fructified.
The last time the company raised any money was in October 2016, where it was valued at around $300-350 million. It had raised $34 million from Mahindra group, Switzerland-based private equity fund Adveq, Infosys co-founder Kris Gopalakrishnan and existing investors including IDG Ventures India.
Two years ago, the company had also acquired Mahindra’s baby care business BabyOye in a cash and stock deal worth $54.3 million.
FirstCry directly competes with Hopscotch and Kids Stop Press. All the three startups haven’t been able to secure any funding post-October 2016. On the other hand, MamaEarth, a private label mother and baby care brand, has received two rounds of funding this year
This showcases a market scenario where private labels are more sought out in the baby care space, just as Mothercare, than marketplaces.
To add to FirstCry’s competition, Amazon India’s Amazon Fashion also launched a dedicated online baby clothing store in March 2018.
With the current financial results, it might look like FirstCry is heading towards profitability, but the small increase in revenue, and dry funding accounts, it is difficult to say that the performance is optimum or the company’s on a path leading to growth.