By acquiring Oi Playschool in what is the first of its kind deal in a rapidly consolidating market, SoftBank-backed FirstCry, which retails goods and also runs a social network catering to young parents and children, enters the education room. FirstCry plans to expand Oi Playschool — currently running about 55 centers in Hyderabad and Bengaluru — with over 1,000 centers in five years across the country.
The size of the deal was not disclosed, but buying the business from Hyderabad’s People Combine Group, which sold Oakridge Private School for Rs 1,600 crore to Nord Anglia in Hong Kong earlier this year, is an all-cash transaction. Oi would contend with players such as EuroKids owned by KKR and Kidzee owned by the Essel Group. The size of this segment is set at $2 billion, expected to reach $5 billion by 2022. Firstcry Offline Store.
“What is appealing about Oi is that it is a luxury chain and their educational program is one of the best on the market with very dedicated franchisee partners who are more academic than business owners,” said FirstCry CEO Supam Maheshwari, a serial entrepreneur who started the company in 2010. Last year, the company raised $400 million from the SoftBank Vision Fund, worth more than $850 million.
The move, which is FirstCry’s second major acquisition after purchasing Mahindra’s baby care retail business Babyoye in 2016, will enable the company to be present throughout a child’s life cycle from pre-design to early education. FirstCry is already the largest retailer in the baby care space, both online and offline, with over 400 stores, and recently expanded overseas from Dubai. The company based in Pune also runs a public platform called FirstCry Parenting, which has 13 million active monthly users (MAUs). It also has an activity-based early learning subscription box called Intellikit.
Oi is currently operating through a franchisee model and FirstCry plans to aggressively expand its presence in what is perceived as a fragmented market with few national brands, both through organic and inorganic routes. It will set up expansion-focused business development.
Researchers monitoring the space said playschools are one of education’s fastest-growing segments, and unlike-12, they also do not include non-profit units. “I see this as the convergence of forwarding because the customer is the same— young parents. Children’s spending is the largest wallet share for young parents, and playschool and daycare are becoming an increasingly important part of it, “said KPMG India head.
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