VCs double down on baby care: Peak XV Partners, RTP Global lead new funding sprint for BabyMD, Ozi and Peeko

The investor interest in companies like Ozi and Peeko has also nudged FirstCry to provide quicker deliveries in more cities.

Less than three months since their last fundraise, a slew of baby care-focused startups are already back in the market and are in the advanced stages of closing new funding rounds as venture capital firms find the initial traction for their products and services to be promising, according to several people familiar with the developments.

While Ozi, a quick commerce platform for babies, is negotiating a fresh round with RTP Global, Peak XV Partners is in the advanced stages of investing in BabyMD, a startup that runs a chain of pediatric clinics in Bengaluru, they added.

Peeko, meanwhile, has kicked off its fresh round and is engaging with several VCs for a fresh capital infusion.

How much is Ozi raising and from whom?

Ozi, a Gurugram-based baby care quick commerce startup which raised $3.3 million (around Rs 29 crore) from Blume Ventures in October, is “now raising around $10 million (about Rs 88 crore) in a new round led by RTP Global,” one of the persons cited above said.

RTP Global has backed Cred, Invideo, MPL, and several other startups in India.

“While RTP is likely to lead Ozi’s round by putting in $6-7 million (Rs 50-60 crore), other investors, including existing backers, will put in the remaining $3-4 million (about Rs 25-30 crore) into Ozi,” the person added.

Its arch rival, Peeko, is busy engaging with potential investors, too.

What is happening at Peeko and how much is it raising?

Peeko, a baby care quick commerce platform from Bengaluru, is preparing for a fresh capital infusion as well. The round is firming up shortly after Peeko raised $3.2 million (around Rs 28 crore) from Stellaris Venture Partners in August.

“Peeko has kicked off its round fairly recently and is engaging with several VCs. It is looking for a lead investor who is willing to put in around $5-6 million (about Rs 45-55 crore),” a source said.

While the total round size remains undecided, the existing backers are willing to invest money on a pro-rata basis to hold on to their stake and upsize the round, the person added.

While there were a few who questioned the need for vertical quick commerce companies, the initial traction seems to suggest startups in the sector have legs to run, as per another person cited above.

Both Ozi and Peeko compete with BSE-listed FirstCry, an e-commerce company founded in 2010 and focused on baby products.

The investor interest in companies like Ozi and Peeko has also nudged FirstCry to provide quicker deliveries in more cities.

“...our overlap with quick commerce remains small…However, quick commerce has led to an increase in consumer expectations when it comes to on-time delivery and faster delivery of goods being shipped online,” Vivek Goel, chief business officer, FirstCry told analysts while announcing Q2 results.

“...And in order to meet those increased expectations…we have been expanding our initiative around faster delivery…we have expanded to 13 cities, from four cities over seven months," he added.

While VC interest in Ozi and Peeko is piquing, investors are also flocking to other startups, such as BabyMD, that are specifically dabbling in baby care as the sector remains hot.

What is happening at BabyMD? How much is the company raising?

BabyMD, a chain of clinics offering pediatric consultations, therapy, vaccination support services and more in Bengaluru, “is in the advanced stages of raising $4-6 million (Rs 35-50 crore) in a round led by Peak XV Partners,” a source said.

Several such startups are stitching together new funding rounds at a time when a select cohort of users is looking for companies with a specific focus on particular sectors instead of companies that offer multiple products and services on a single platform.

Ozi, RTP Global, Peeko, Peak XV Partners, and BabyMD did not reply to Moneycontrol's queries.