boAt's Make-in-India plans set sail after $100-mn funding from Warburg

boAt founders Aman Gupta (left) and Sameer Mehta
Home-grown lifestyle brand boAt has raised $100 million from an affiliate of global PE player Warburg Pincus to create and support a manufacturing ecosystem under the Make-in-India initiative. This will enable the company to manufacture its own products in India.

According to sources, with the new fundraise – one of the highest by a start-up in the direct-to-consumer space – the company is now valued at approximately $280 million. 

The funds will be used to enhance R&D capabilities of the firm and initiate its India plans. “We have the vision to manufacture most of our products in India. We want to ensure that almost 50 per cent of our products are made in India in the next couple of years,” said Sameer Mehta, co-founder, boAt. Currently, most of the products that the company offers, including headphones, earphones, smartwatches and speakers, are manufactured in China.

While the company will be scaling up contract manufacturing to start with, it also has a vision to set up a standalone factory in India. “We have plans for a manufacturing unit, which is under discussion with our board members,” added Mehta. 

Avendus Capital acted as the financial advisor to boAt and its shareholders on the transaction with Warburg Pincus.

Started in 2016 by Mehta and Aman Gupta, who was earlier with Harman and in-charge for opening JBL stores in India, boAt will soon hit the Rs 1,000-crore revenue milestone as it continues to sell around 15,000 products per day, claim the founders. One of the top five global wearables brands globally, according to an IDC report, boAt closed last year with a revenue of Rs 700 crore.

“We see a compelling growth story in boAt and believe the company is well-poised to build upon the strong leadership position it has carved out within the industry. It stands to benefit from the secular tailwinds of e-commerce growth in India,” said Vishal Mahadevia, managing director and head, Warburg Pincus India.

It had raised a small round of Rs 6 crore from Fireside Ventures in 2018. “boAt is the perfect example of a consumer brand built successfully on quality, consumer insights, smart pricing, and focused marketing. An investment by Warburg Pincus is a testament to the long-term growth potential of an India-made consumer start-ups,” said Kanwaljit Singh, founder & managing partner at Fireside Ventures, the earliest investor in the company. 

“We never looked at funding every few months. We are a profitable company and did not need capital for survival. We needed it for growth. That’s what Warburg will help us achieve,” said Gupta.

boAt also began selling its products offline last year with 20 per cent sales now coming from this channel. The brand is already present in 5,000 multi-brand stores in the country. It wants to double this in the next 1-2 years.

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