Wearables startup boAt has raised approximately $60 million from Warburg Pincus and new investor Malabar Investments. The funding comes on the heels of the startup’s IPO plans being postponed due to poor market sentiment.
The boAt raised $100 million from Warburg Pincus in January 2021, followed by a $6.7 million investment from Qualcomm in April. The new investment will allow the company to expand its business across channels and geographies by consolidating its category leadership in audio products.
The company stated in a press statement that it would also improve its R&D and design capabilities and promote the creation of a local manufacturing ecosystem. The Delhi-based business submitted a draft red herring prospectus (DRHP) to SEBI in January of this year to begin its INR 2,000 crore initial public offering (IPO).
It gained permission from the market authority for the impending IPO four months later. But the business has formally abandoned its aspirations to list. Previously, boAt was permitted to raise INR 180 crore before its IPO, but the company aggressively withdrew its DRHP after raising more than INR 500 crore in equity.
Tepid market response dampener for Indian startup’s growth plans
In the upcoming 12 to 18 months, the startup will probably reevaluate its IPO intentions. The person asked to remain anonymous. Recent market instability caused several businesses, like MobiKwik, to postpone their intentions to go public. Droom recently canceled its IPO preparations.
“We now want to make smartwatches our second core and will replicate the boAt digital playbook to become global leaders in this category. The new funding will allow us to invest significantly to disrupt the smart watches space with more innovative products,” said Aman Gupta, co-founder and chief marketing officer at boAt.
BoAt, founded in 2014, has five brands under its control: boAt, Redgear (which it acquired in 2020), Tagg (which it acquired in 2022), the wearable brand Defy, and its care and grooming brand Misfit. The company claims to be the top audio brand in the nation and the world’s second-largest earwear brand because of its alliances with multinational corporations like Qualcomm, a shareholder in boAt, Dolby, Dirac, and others.
The business established a joint venture with electronics producer Dixon Technologies earlier this year to produce its goods. The business is also making preparations to expand the boAt brand internationally. Currently, a sizeable chunk of boAt’s products (1 million units each month) is made in India.