How boAt has cornered the audio accessory market

Consumer electronics startup, boAt, received INR 16 Cr (about USD2 Mn) in debt financing from investment lending firm, InnoVen Capital. The startup also recently acquired USD2.9 Mn in venture debt from Sachin Bansal’s BAC Acquisitions.

Founded by Aman Gupta and Sameer Mehta in 2016, boAt is a technology company that manufactures electronics products in India and China, including headphones, earphones, speakers, soundbars, travel chargers, and premium rugged cables.

boAt products are available online (on sites such as Flipkart, Amazon, Myntra, and Snapdeal) and in-store (at Croma Retail, Poorvika Mobiles, Vijay Sales, and others).

“We are happy to secure a debt investment from InnoVen Capital, as it enables us to raise growth capital without reducing equity,” said Mehta. “As we scale more heights, we will focus on profitability and sustainable increase while minimizing our capital.”

In May 2018, the company raised an initial seed investment of INR 6 Cr. (around USD872 K) from Fireside Ventures. According to boAt, it has acquired more than 1.2 Mn customers and registered INR 100 Cr. in gross sales FY18. The company predicts an increase of INR 500 Cr. in sales over the next couple of years.

A “lifestyle” brand
boAt founders say they began the consumer electronics company with the intent to offer reliable and popular, pocket-friendly audio devices and accessories to the “new-age” generation. According to co-founder, Gupta, the company markets its products as lifestyle accessories — not just as electronics.

boAt’s “lifestyle” devices include an extensive catalog of headphones, earphones, speakers, travel chargers, premium cables, and more. Soundbars are the latest addition. Demand for these items is expected to grow significantly — particularly for home audio consumers.

The company’s products were highlighted at Lakmé Fashion Week in Mumbai this year. In fact, runway models at the event accessorized with some of boAt’s devices. The startup says that style and quality are essential to its branding.

Company growth
According to boAt’s filings with the Registrar of Companies (RoC), its FY2018 revenues increased to Rs 108 crore from only Rs 27 crore in FY2017 — that’s more than four times the growth.

The customer electronics startup says it now markets more than 6,000 units per day with four pieces sold every minute. The company is forecasting sales of Rs 500 crore over the next five years.

boAt’s shipping partnerships have also driven the company’s growth. Along with marketing on Flipkart, Amazon, Myntra, and Jabong, it’s now selling at Croma outlets and testing ideas in-shop to give potential buyers a more personal experience of its products. In-store sales account for about 20 percent of boAt’s revenues, and the company is researching more distributor tie-ups in South India. It’s also planning to start selling on its own store’s website by 2020.

boAt competitors include audio accessories manufacturers and phone companies, such as Realme, Xiaomi, and others, which also offer affordable wireless earphones and portable speakers. However, boAt has become one of the most trusted, cost-effective brands after only three years in the industry.

The future
As mentioned above, boAt raised its first series of funding (Rs 6 crore) from Fireside Ventures, an early-stage VC firm that supports consumer brands. These funds will be used to manufacture new products and expand boAt’s customer base. The Managing Partner of Fireside Ventures, Kanwaljit Singh said boAT is one of the most influential brands in their portfolio and that it could also become a family brand in the coming years.

boAt plans to strengthen its foothold in India first and then enter the international market. boAt’s efficient and strong business model, coupled with targeted business insights, has enabled the brand to enjoy high margins and double-digit earnings from its very first sale.