That includes Brainbees Solutions Pvt. Ltd—the parent company of baby products retailer FirstCry—that made a stellar stock market debut this week.
The ChrysCapital executives were looking to make their first investment in FirstCry and had conducted most of their due diligence online over Zoom meetings. But they wanted to meet in person the FirstCry team and co-founder and chief executive Supam Maheshwari.
“We were amazed at the understated office that he worked out of, which was unlike many other new-age founders that we come across,” said Kshitij Sheth, managing director, ChrysCapital.
ChrysCapital would eventually participate in a $315 million funding into FirstCry alongside TPG Growth and Premji Invest in 2021, valuing the company at $1.9-$2 billion. FirstCry had gained its unicorn tag a year earlier, when it raised $296 million at a $1.2 billion valuation in a funding round led by Japan’s SoftBank.
Many investors have similarly found Maheshwari non-flashy, bringing up comparisons with another high-profile entrepreneur who scored an electric stock market debut last week.
Bhavish Aggarwal, outgoing and opinionated, has founded three unicorns, including the now publicly listed Ola Electric Ltd, ride-sharing platform Ola Cabs, and artificial intelligence platform Krutrim, India’s first AI startup estimated to be worth at least $1 billion.
Also read | FirstCry, Ola Electric IPOs to build a club of super-rich
Maheshwari is considered an introvert, building his businesses almost under the radar.
On Tuesday, industrialist Anand Mahindra told analysts and investors at FirstCry’s listing ceremony that his team at Mahindra Retail, whose Mom & Me stores originally competed with FirstCry, had found that they were “better off supporting him (Maheshwari) than fighting him”.
When Goliath became a fan
In 2016, FirstCry acquired the baby apparel business of the auto-to-technology conglomerate Mahindra & Mahindra Group, gaining a chain of traditional retail stores across the country.
Mahindra Partners, the investment arm of Mahindra group, also invested in FirstCry, becoming a shareholder.
“(Maheshwari) has created a delivery system which is the envy of many online retailers,” Mahindra said on Tuesday, narrating the backstory of that deal.
FirstCry may have been conceptualised as an online-first retailer when it was incorporated in 2010, but it also had a fledgling offline presence aligning with the founders’ omnichannel mindset.
My team found that they were better off supporting him (Maheshwari) than fighting him.
“We started our first store in Gujarat within months of starting the business,” said co-founder Amitava Saha. “We knew that though digital is the way forward, the Indian consumer story is an omnichannel play and having physical stores is essential.”
Another crucial early decision was to enter manufacturing, allowing Maheshwari and Saha to create a moat for the business.
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“It is a myth that manufacturing will be a drag on capex. It in fact helps squeeze out better margins,” said Sudhir Sethi, founder and chairman, Chiratae Ventures (formerly IDG Ventures), an early backer of FirstCry. “Most successful consumer businesses have emerged winners because they understood what works for India and how to bring down costs.”
Also read | FirstCry IPO: Cracking the baby business code
FirstCry’s offline presence, though, cast doubts among some potential investors because of the narrative around online retail. Bala Deshpande, managing partner at Megadelta Capital, recalled that convincing her investment committee to back FirstCry had been tough.
“They were coming from a US perspective and said digital is the way to go. And then, much later, when Amazon started its first retail outlet, I said, seems Supam knew it,” Deshpande said.
Megadelta eventually sold its investment in Brainbees making manifold returns, and Deshpande now sits on the company’s board as an independent director.
Supam has two ears and a very stable head between them. He listens to everyone, deliberates, diligences and then decides.
Maheshwari showed conviction elsewhere too.
When the time came for FirstCry to consider an international expansion, the company’s board and key investors suggested Indonesia, perceived to be a homogenous market for Indian companies. Maheshwari spent days in the Southeast Asian country along with his team and decided against it.
“He came back after doing thorough diligence and said they won’t do it in Indonesia, which was uber competitive, and rather pitched for the Middle East,” said Sheth of ChrysCapital. “Supam has two ears and a very stable head between them. He listens to everyone, deliberates, diligences and then decides.”
Busy bees
Now that Brainbees is listed, Maheshwari and Saha are working on taking their second company, XpressBees, public in 18-24 months. The logistics services provider gained its unicorn status in 2022, and is now valued at about $1.47 billion.
“There is a mutual trust and telepathic understanding between us which is hard to replicate,” Saha said, highlighting the need for a healthy working relationship between founders.
“When we first met before joining Brainvisa in 2003, he was clear it should be a long-term association. Join only if you never leave,” Saha recalled his conversation with Maheshwari from more than two decades earlier.
When we first met he was clear it should be a long-term association. Join only if you never leave.
Maheshwari, an engineer and an MBA from the Indian Institute of Management-Ahmedabad, started e-learning startup Brainvisa Technologies in March 2000, eventually selling it to Indecomm Global in 2007 for $16 million. He declined to be interviewed for this report.
After a stellar debut on 13 August, Brainbees shares ended the next day’s trading down 5.30% at ₹643.10 each on NSE. That’s still above the company’s IPO price band ₹440- ₹465 per equity share of the face value of ₹2.
While the company had sought a valuation of $2.9 billion in the IPO, Brainbees had a market capitalisation of ₹33,388.73 crore, or nearly $4 billion, at the end of trading on Wednesday, 14 August. The stock markets were closed on 15 August on account of India’s Independence Day.
Also read | FirstCry’s top executives, investors likely to win big with IPO
Maheshwari and Saha’s third business, Globalbees, a brand aggregator, became a unicorn in 2021 when Premji Invest led a $110-million investment into the company at a $1.1 billion valuation.
Having achieved a major milestone for Brainbees with its public market listing, Maheshwari can now work on replicating that success with his two other ventures.
Why the bees? Because bees are the most hardworking and they make a lot of honey (money) too, ChrysCapital’s Sheth recalled Maheshwari telling him.
They have beaten all the odds, beaten many giants with more money.
“Baby and kids is a really tough category. There is a graveyard littered with great teams and great companies that were trying to pursue the same goal. But FirstCry has succeeded where so many have failed,” said Paul Davidson, partner, SoftBank Vision Fund said at Brainbees’ listing ceremony on Tuesday.
“They have beaten all the odds, beaten many giants with more money, more people to build an imitable, lasting and trusted brand.”
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