Exclusive: boAt’s valuation surges to Rs 2,100 Cr in Rs 440 Cr Series B round

Consumer electronics startup boAt has raised Rs 440 crore in its Series B round from Cayman Islands-based South Lake Investment Limited. Regulatory filings show that boAt has allotted 15,507 Series B preference shares at an issue price of Rs 2,83,749 to raise the sum.

The fresh funding from South Lake has come at a time when Warburg Pincus was reportedly in talks with boAt to acquire a 40% stake in the Delhi-based company.

Following the fresh investment, promoters of boAt -- Sameer Mehta and Aman Gupta -- have diluted their shareholding from 90.72% to 70.8%. Both Mehta and Gupta hold an equal stake of 35.04% stake in the company. South Lake Investment has acquired 21.05% equity stake in boAt, while other investors, including angels, collectively hold 7.25% stake.

According to Fintrackr’s estimates, the investment has been done at a post-money valuation of nearly Rs 2,100 crore.

The four-year-old company’s portfolio includes headphones, earphones, earbuds, speakers, travel chargers and premium cables. In November, it also forayed into the wearable segment with the launch of its smart band. boAt sells its product through e-commerce platforms such as Amazon and Flipkart alongside its own platform and has a presence in more than 5,000 retail stores.

boAt has been able to gain ground among millennials and has emerged as a promising direct to consumer or D2C brand in the headphone and earbuds segment. To understand local contours and decrease component imports, the company had also set up a research and development wing in the country.

To expand its product offering across newer segments, boAt had made four key appointments to its leadership team in October. Sushant Dalmia was appointed as CFO while former LINE India head Damandeep Soni Singh as the Vice President of the company. Divyanshu K and Pankaj Raut were appointed as VP for strategy and supply chain respectively.

This is the largest investment in boAt till date which had previously raised funds, primarily as debt. Venture debt firm InnoVen Capital had invested Rs 25 crore in September and around Rs 16 Cr in July 2019. In the same month, boAt had picked up Rs 20 crore in debt from Sachin Bansal’s Navi Technologies (previously BAC Acquisitions).

Early-stage investment firm Fireside Ventures had backed boAt in May 2018.

While boAt is yet to file its financials for FY20, the company claims to have registered gross revenue of over Rs 500 crore in FY20 and targets to double the topline by FY24. According to boAt’s CMO Gupta, the company has grown 2.5X from the previous year and since inception, it has been EBITDA positive.