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D2C unicorn boAt calls off IPO, raises Rs 500 crore via preference shares 

D2C unicorn boAt calls off IPO, raises Rs 500 crore via preference shares 

Delhi-based boAt has raised a new round led by Warburg Pincus and Malabar Investments. It might even reconsider its public listing plans when the capital markets look up.

boAt’s postponing of its IPO comes after the likes of Mobikwik, PharmEasy and Droom also cancelling their IPO plans, amidst increasing volatility in the capital markets boAt’s postponing of its IPO comes after the likes of Mobikwik, PharmEasy and Droom also cancelling their IPO plans, amidst increasing volatility in the capital markets

Consumer electronics startup boAt is not going public anytime soon. The homegrown wearables brand has officially withdrawn its DRHP, which was filed in January in a bid to raise Rs 2,000 crore through an initial public offering (IPO). SEBI had granted its approval four months later. 

boAt’s postponing of its IPO comes after the likes of Mobikwik, PharmEasy and Droom also cancelling their IPO plans, amidst increasing volatility in the capital markets. boAt also announced that it raised Rs 500 crore (~$60 million) via “private placement through preference shares” from its existing investor Warburg Pincus and new investor Malabar Investments. This mode of fund-raising is increasingly gaining acceptance among late-stage startups that want to avoid a valuation dip in a bearish market. 

“According to [SEBI] guidelines, boAt was allowed to raise Rs 180 crore before the IPO, but we have raised more than Rs 500 crore of equity, so it has proactively withdrawn the DRHP,” a company spokesperson told Business Today. He added that boAt could reconsider its IPO plans in the next 12-18 months depending on the macroeconomic situation. 

Prior to this, in January 2021, Warburg Pincus had invested $100 million in an equity round in boAt. The Delhi-based startup also raised $6.7 million from chip giant Qualcomm in April last year. 

It plans to utilise the fresh funds in ramping up its presence in the fast-growing smartwatches category as well as scale up its geographical reach both in India and in international markets. boAt also looks to enhance its R&D and design capabilities, while boosting its local manufacturing ecosystem under the Make-in-India initiative.

Aman Gupta, Co-founder & Chief Marketing Officer at boAt, said, “We have established clear leadership in our core personal audio category and are the number two player globally in earwear. We now want to make smartwatches our second core and will replicate the boAt digital playbook to become global leaders in this category as well. The new funding will allow us to invest significantly to disrupt the smart watches spaces with more innovative products.”

In the affordable smartwatches segment, boAt competes with other homegrown brands like Fire-Boltt and Noise. Together, these three players drove India’s share in the global wearables market to an all-time high of 15 per cent in Q2 2022, according to data from Canalys. With shipments of 6.3 million smartwatches, India is now the world’s third-largest smartwatch market after China and the US. 

Sameer Mehta, Co-founder & Chief Product Officer, of boAt, shared, “We are very excited about the potential of smartwatches. The market today is in the early stages of evolution and most players don’t have control over the end-to-end stack to offer compelling features to consumers. There is a significant opportunity to build the category and launch more distinctive and technologically advanced products.” 

boAt added that it clocked revenues of Rs 3,000 crore at the end of FY22, growing at 100 per cent year-on-year, “while building a profitable business and investing for the future”.

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Also read: Homegrown brand boAt mulls Rs 3,500 cr IPO, eyes $1.5 bn valuation