BoAt  raises  $60 mn, freezes plan for IPO

Wearables startup boAt on Friday deferred its public share sale plans and raised $60 million ( ₹500 crore) from private investors instead, amid continuing concerns over the volatile stock market.

Existing investor Warburg Pincus and new investor Malabar Investments participated in the round, Imagine Marketing Pvt. Ltd, which makes boAt smartwatches and audio gear, said.

Warburg Pincus invested through its affiliate, South Lake Investment, in a private placement of preference shares.

A company executive said in the condition of anonymity that the transaction values it around $1.4 billion, the same as it was expected to seek in the initial public offering.

Imagine Marketing plans to use the funds to expand its smartwatch category and scale up business across channels and markets in India and abroad.

It also plans to boost its audio category, enhance research and design capabilities, and build up local manufacturing.

The Mumbai-based company filed its draft initial share sale papers with the markets regulator in January to raise ₹2,000 crore. However, like several other startups, such as PharmEasy and Droom Technologies, the company put its listing plans on the back burner, citing tough market conditions.

“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 space with more innovative products,” said Aman Gupta, co-founder and chief marketing officer at boAt.

The company is also diversifying its manufacturing in partnerships with various leading electronic manufacturing services (EMS) players in India, including Dixon, with whom it has also created a manufacturing joint venture.

It has previously made similar arrangements with leading global companies such as Qualcomm (also a shareholder in boAt), Dolby and Dirac to make higher quality products more competitively.

The company posted a revenue of nearly ₹3,000 crore in FY22. With the ambitious IPO plans in mind, it made six top hires this year.

In April 2021, boAt received an undisclosed amount from Qualcomm Ventures. A year earlier, it raised ₹735 crore from Warburg Pincus.