Last week, Pune based FirstCry raised $400MM from Softbank, putting it in touching distance of being a unicorn.

Few non-parent folks may have heard of FirstCry, despite its recent massive fundraise. But the company has been especially active on deal-making and startup creation. It acquired BabyOye from Mahindra and Mahindra for $35MM. Its logistics spinout XpressBees has raised $135MM as a standalone entity, making it one of the most well-funded logistics companies in India. Brainbees Solutions, FirstCry's parent company, is truly shaping up like a conglomerate.

But where did the now baby giant make its first baby steps?

FirstCry's founder Supam Maheshwari is a serial entrepreneur, having started his first venture BrainVisa technologies in 2000. The company was a far cry from FirstCry, providing e-learning solutions to companies globally. Being born out of the dot-com bust would be trial by fire, but the company would end up scaling to 450 employees. Mr Maheshwari finally sold the company for $25MM. 

The entrepreneurial bug wouldn't stop biting, and the BrainVisa experience would be the precursor to BrainBees. 

As a father buying products for his daughter, Mr Maheshwari found himself unable to get products easily. Armed with a strong experience of scaling a company, Brainbees was born in 2010. The problem that Brainbees' brand FirstCry would solve would exactly be what Mr. Maheshwari was trying to solve for himself. 

It was a problem the parents of 25MM+ new babies would try to solve every year.

The Indian baby care and products market are pegged at ~$10Bn, and it is highly disorganized with 95% being offline. For a stage of life where extreme care is needed, the products available are non-standard and varied in price. Both product quality and discovery are poor, despite parents needing it.

The most compelling consumer behaviour is that parents are willing to pay well if the product is good, indicating strong margins. For a baby, that takes 4-5 years to become a child, acquiring a loyal customer (mother/father) could result in a high lifetime value through purchases over time. Building a trusted brand could thus result in long term value.

Valuable, disorganized and offline, as readers would know, are three characteristics for a market to be disrupted. 

For a "niche vertical", babycare and mothercare products is a fairly large market. Monopolizing niches, as Peter Thiel would put it best, would be possible for a player like FirstCry. The company started off as an online matchmaker looking to connect high-quality baby care brands with parents looking for high-quality products. Like most companies start with attracting early adopters, FirstCry's initial customers would be wealthy parents who purchased online.

FirstCry would soon raise its first round of capital in 2011, and begin to scale rapidly.

By 2013, the company's revenue had reached 20 Cr ($3MM), and FirstCry would be prescient in adding offline stores and adopting an omnichannel strategy. The expanding customer base of the company, would surprisingly but logically, be from Tier 2 cities. Parents in Tier 2 towns without access to quality products, would flock to the high-quality platform. 

These would add to FirstCry's scaling to 50 Cr ($7MM) in 2014 and 80 Cr ($11MM) of revenue in 2015, assuming a 20% take rate on GMV. 

Over these years, the company would also start a business called GoodLife, that would leverage its parental customer base to sell beauty products. While the business would end up failing, it would be an indication of the CEO's fabled willingness to experiment. While building out the business to service customers across the country, the company would build a robust logistics arm. 

Just like the giant AWS started as an internal project for Amazon, XpressBees started as an internal division in 2012 that would become a massive business standalone. 

From 2015, XpressBees would go on to raise $150MM by itself, which shows why FirstCry is even more valuable than it appears to be. FirstCry would continue to grow, to 173 Cr ($26MM) in 2016, and 239 Cr ($37MM) in FY2017. Within 4 years, the company had grown 10x, and had grown in ambitions in the rapidly scaling organized market.

FY2017 would result in an audacious acquisition of Mahindra's BabyOye for$54MM.

The acquisition was larger than FirstCry's Series D fundraise, and would result in buying out a large offline competitor with 120 stores. It would turn out to be a segue into the Mahindra conglomerate, and a 2x expansion on the offline front for FirstCry.

The long term value that comes up with acquiring parents is because you need to spend once on customer acquisition, but can continue to generate margin over years. It would only be time before FirstCry would see this value, and in 2018, the company would hit revenue of $52MM, while paring losses by 7x to $7MM. With a target of reaching 1MM parents (~800K babies) every year, that is a spend of $60 per year per baby.

Growing 50%, while getting closer to profitability is a business that could grow even faster with capital. But even at a $60MM revenue, a valuation of $800MM is still 15x revenue, which appears expensive.

Except, if the market is no longer India focused. 

From being India's largest mothercare and baby platform, one should notice the change in how FirstCry describes itself as Asia's largest online platform for babies and kids. Not only will the business now tap the $10Bn Indian market, but also get into other Asian markets.

The Asian continent is the most populous in the world, making millions of parents everyday. It is fundamentally a great move to focus on parents in Asia. FirstCry will be able to grow into a larger market, both online and offline, justifying a higher valuation for the company.

It is not far away from when FirstCry would truly be a unicorn.