boAt, an Indian consumer electronics brand has raised $100 million in a new financing round led by Warburg Pincus, a New York-headquartered private equity firm. The Delhi based start-up aims to leverage the funds to expand product portfolio and R&D facilities.
Being the most successful hardware startup in the world’s second largest internet market, boAt is now valued at a post-money valuation of about $300 million, a person familiar with the matter told TechCrunch.
“The investment is great news for not only the company but also for the entire direct-to-consumer (D2C) sector. The investment has come at the right time as we make efforts to ramp up our manufacturing and global supply chain,” said Aman Gupta, co-founder of boAt.
boAt has emerged as one of the leaders in the hardware manufacturing sector, a sector in which only a few well-established companies have been able to make a mark. In the September quarter, the Delhi-based company reached the top five in the global wearables market, the first Indian company to do so, according to researcher IDC.
Founded in 2016 by Aman Gupta and Sameer Mehta, boAt started off as an audio company and slowly ventured into lifestyle technology and consumer electronics. The secret sauce of Boat, at least in part, is that it has managed to keep the price points of its accessories low while also making them aesthetically appealing. The startup counts the young generation as its target audience who want good-looking accessories at low prices but also tend to upgrade every few months.
Another possible reason why things worked out for Boat, which had only one institutional investor prior to the new round (Fireside Ventures), is that it showed up at the right time. The startup began its journey by selling charging cables and power adapters. Its beginning coincided with the Indian smartphone market hitting a tipping point, where millions of people had started to buy a handset each month.
A few months into its journey, India’s richest man (Mukesh Ambani) further accelerated the smartphone market with the launch of telecom network Reliance Jio, which offered 4G data at no price for several months, suddenly giving tens of millions of people in the country yet another reason to upgrade to a smartphone.
boAt has expanded into several categories in recent years and followed the same strategy that made it stand out in the first place. Its fitness wearable starts at Indian rupees 1,799 ($24.50), smartwatches at $34, charging cables at $3.40, home theatre soundbars at $54, wireless speakers at $13.50, headphones at $5.50 and AirPod-like earbuds at $27.
An early investor in boAt, Kanwaljit Singh, Founder and Managing Partner at Fireside Ventures, said, “boAt has grown to become the market leader in the lifestyle accessories segment. It’s the perfect example of a consumer brand built successfully on quality, consumer insights, smart pricing, and focused marketing. Given our interest in the consumer brand category, we spotted and saw the prospects of a high-growth consumer startup addressing the audio needs of millennials and Gen Z. An investment by Warburg Pincus is a testament to the long-term growth potential of India-made consumer startups.”
According to marketing research firm IDC, Boat commands over 30% of the wearable market in India and is the fifth-largest brand globally in the category.