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The Delhi-based startup clocked revenue of $95 million in FY20 and aims to double it in the current financial year.
Indian electronics and lifestyle startup boAt Lifestyle has raised approximately US$100 million in a Series B funding round, the startup announced yesterday. The new round was funded by an affiliate of global private equity firm Warburg Pincus.
Founded in 2016, boAt sells budget-friendly headphones, earphones, and other smartphone accessories. According to IDC data, the startup ranked as the world’s fifth largest wearable brand in Q3 2020. boAt has also captured one-third of the market share in India and ranked first in the True Wireless earphones category in the domestic market in Q3 2020, according to a report by Counterpoint Research.
The latest investment will be utilized towards research and development and expanding the startup’s product portfolio, boAt said in the statement. It added that it aims to create and support a manufacturing system under the ‘Make In India’ initiative.
Aman Gupta, Co-founder boAt said in the statement, “The investment has come at the right time as we make efforts to ramp up our manufacturing and global supply chain.”
boAt Co-founder Sameer Mehta added, “Going forward, with the Government’s support, we will focus on building capabilities in domestic R&D and undertake vertical integration across both the hearable and wearable space to establish India as a global supplier.”
Climbing to the top
The four-year-old brand was launched in India when the market was being stormed by Chinese players like Oppo, Vivo, and Xiaomi. These Chinese players were competing head-on with the established giants like Apple and Samsung, and boAt, a tiny fish in the sea, was struggling to grab a piece of the market.
The brand started by selling mobile phone cables and charges, and bagged a profit of more than $200,000 at current exchange rates in its first year of operations. Since then, the company has expanded its product portfolio to include fitness wearables, smartwatches, wireless speakers, home theatres, Air pod-like earbuds, and more.
In FY20, boAt clocked revenue of approximately $95 million at current exchange rates (INR701 crores), and earned a profit of roughly $6.7 million (INR49 crores). The company expects to double this revenue in the current financial year.
The brand claims to sell 15,000 units every day. According to IDC data, boAt shipped 3.3 million units in Q3 2020, compared to 800,000 units in Q3 2019. While the global wearables market grew by 35.1% in Q3 2020, boAt outperformed the market and grew by 316.9% year-on-year, the data shows.
The brand has gained popularity for its aesthetically designed low-cost accessories. The company targets the youth since they prefer attractive designs at low prices and upgrade every few months, TechCrunch reported.
Another factor that has contributed to boAt’s growing popularity is its tie-up with IPL teams, and the onboarding of 14 celebrities as ambassadors.
The startup sells its products through offline retail stores and online ecommerce platforms. According to HDFC bank analysts, boAt products are sold through more than 5,000 retail stores across India, the TechCrunch report added.
Although the company did not comment on its valuation, according to an Inc42 report, boAt’s valuation reached $300 million post-money.
Warburg Pincus India Managing Director and Head Vishal Mahadevia said, “We see a compelling growth story in boAt and believe the company is well-poised to build upon the strong leadership position it has carved out within the industry and stands to benefit from the secular tailwinds of e-commerce growth in India.”
Header image courtesy of boAt