BoAt cancels IPO plans, raises INR 500 cr from Warburg, others
- ByStartupStory | October 28, 2022
BoAt, a startup in consumer electronics, won’t be going public anytime soon. The locally produced wearables company has formally withdrawn its DRHP, which was submitted in January in an effort to earn Rs 2,000 crore through an IPO (IPO). Four months later, SEBI approved the transaction.
Following the cancellation of their IPO plans by companies like Mobikwik, PharmEasy, and Droom amid rising market volatility, boAt has delayed the launch of its first public offering (IPO). BoAt also disclosed that it raised Rs 500 crore (about $60 million) from its current investor Warburg Pincus and new investor Malabar Investments through a “private placement through preference shares.” The use of this method of fund-raising is becoming more and more popular among late-stage firms that seek to prevent a drop in valuation in a down market.
BoAt was permitted to raise Rs 180 crore before the IPO in accordance with [SEBI] regulations, but since we raised more than Rs 500 crore of equity, the business has proactively removed the DRHP, a company representative informed Business Today. In light of the macroeconomic environment, he continued, boAt might decide to reevaluate its IPO intentions in the upcoming 12 to 18 months.
Warburg Pincus had previously contributed $100 million to an equity round in boAt in January 2021. The chip industry giant Qualcomm contributed $6.7 million to the Delhi-based firm in April of last year.
It intends to use the additional money to expand both its geographic reach in India and other international countries, as well as its position in the rapidly expanding smartwatch category. Under the Make-in-India initiative, boAt also aims to strengthen its R&D and design capabilities while expanding its domestic manufacturing ecosystem.
“We have clearly established leadership in our core personal audio sector and are the number two player internationally in earwear,” said Aman Gupta, co-founder and chief marketing officer of boAt. Our current goal is to make smartwatches our second core, and we’ll follow the boAt digital strategy to dominate this market as well. With the additional money, we will be able to invest significantly in developing more cutting-edge devices to challenge the smartwatch market.
BoAt is in direct competition with other domestic firms like Fire-Boltt and Noise in the inexpensive smartwatch market. According to data from Canalys, these three companies helped India reach an all-time high of 15% in the global wearables market in Q2 2022. India is currently the third-largest market for smartwatches in the world, behind China and the US, with shipments of 6.3 million devices.
We are quite excited about the possibilities of smartwatches, said Sameer Mehta, co-founder and chief product officer of boAt. The majority of players lack control over the end-to-end stack necessary to provide consumers with attractive features because the market is still in its early phases of evolution. A huge opportunity exists to expand the industry and introduce more unique and cutting-edge items.
At the conclusion of FY22, boAt reported revenues of Rs 3,000 crore, an increase of 100% year over year, “while establishing a profitable business and investing for the future.”
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