boAt In Talks To Raise Funds, Eyes IPO In The Next 12-18 Months

Audio products and smartwatch maker boAt’s parent Imagine Marketing India is in talks with three investors to raise capital. 

boAt cofounder and CEO Sameer Mehta told Economic Times that the fundraise will be “strategic” in nature instead of just raising capital. 

Noting that the audio tech startup has no “pressing need” for capital, Mehta said, “… There are some inbound interests from a large global fund, sovereign fund and one strategic investor. It’s still early days and we are not desperate.”

The cofounder said that boAt is now focussed on improving its financial metrics and turning profitable once again in the current fiscal year (FY25). He added that the startup turned earnings before interest, taxes, depreciation, and amortisation (EBITDA) profitable in the fiscal year 2023-24 (FY24) and expects to become net profitable once again in the ongoing fiscal. 

On boAt’s initial public offering (IPO) plans, the CEO said that the company is looking at going public only after it turns profitable in FY25. He added that the startup is looking at raising INR 2,000 Cr via the IPO in the next 12-18 months. 

“The IPO timeline depends on how fast we improve the financial ratios such as return on capital employed and net profit. We expect to do the IPO in 12-18 months,” he said. 

It is pertinent to note that this is the startup’s second stab at an IPO. In 2022, it filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an INR 2,000 Cr public issue. The markets regulator greenlit the IPO in May 2022. However, the startup later shelved the plans, with cofounder Aman Gupta last year saying that boAt was not in a rush to go for an IPO for the “next couple of years”.

On the ongoing price war in the wearables segment, with entry prices plunging to record low, Mehta said that the market is challenging right now. He, however, expects it to pick up pace and get back into an upswing in the next one to two years. 

He also reiterated the startup’s focus on specialised wearables targeting kids, elderly, sports, health and wellness to grow revenue and market share to dominate the entry-price segment, which is currently dominated by Chinese products. 

Founded in 2016 by Mehta and Gupta, boAt is a major player in the Indian audio and wearables segment and sells a wide range of products including headphones, earphones, smart watches, speakers, travel chargers, among others. 

Backed by the likes of Qualcomm Ventures and Warburg Pincus, the startup’s cofounders together own 54% stake in it. boAt has raised a total funding of about $177 Mn till date. 

boAt slipped into the red for the first time in FY23, clocking a net loss of INR 129.4 Cr as against a net profit of INR 68.7 Cr in FY22. The loss was largely on account of its investments into local manufacturing. However, operating revenue rose 18% year-on-year (YoY) to INR 3,376.7 Cr in FY23.