Consumer electronics startup boAt is in the final stages to acquire Delhi-based consumer electronics brand Tagg Digital, said two sources aware of the details of the transaction.
“boAt has been in conversation with Tagg for over two months and the contours of the deal is finalised,” said one of the sources requesting anonymity. Post completion of the deal, Tagg’s team and co-founders would join boAt.”
boAt has established itself as a strong brand in true wireless stereo headphone or TWS and Bluetooth speaker space. This could also be noticed from Counterpoint’s Q1 2021 data which placed it top player in the TWS segment for three consecutive quarters. According to Counterpoint, it had 28% market share in the TWS segment during the last quarter. With this acquisition, boAt is looking to further strengthen its dominance in this space
Founded by Rohit Dhingra, Amitesh Bharadwaj, and Saurav Prakash – Tagg manufactures wireless earphones, buds, smartwatch, earphones and speakers. The five-year-old company is pure-play bootstrapped and didn’t raise any capital to date. Entrackr has confirmed this independently through regulatory filings.
“The deal size would be anywhere between $5-8 million,” said a second source who also wished not to be named as talks are private. According to the person, the transaction is likely to be announced soon.
Queries sent to Tagg and boAt didn’t elicit any immediate response. We will update the story in case they do.
Emerging as one of the top direct to consumer or D2C brands in TWS, Bluetooth speaker and wearables space, boAt has gained popularity in the past couple of years. The company is also getting a significant boost with emphasis on made in India campaigns and apathy against Chinese brands.
In January this year, boAt had raised $100 million from New York-based private equity fund Warburg Pincus. Using the proceeds, the company is also building R&D and local manufacturing capabilities. Entrackr had exclusively reported about boAt’s Series B round in December.
Unlike most of the consumer internet companies, boAt has been able to churn a profit with a 3X jump in its operating revenue in FY20. According to Fintrackr, the company had managed to almost triple its earnings from sales to Rs 700.44 crore in FY20 from Rs 239.4 crore in FY19. boAt registered an impressive 460% growth in profit to Rs 48.85 crore in FY20.
Wireless headsets contributed 53.6% of its total sales whereas wired earphones and Bluetooth speakers made up 18.8% and 16.1% of boAt’s total revenue. Accessories including smartwatches, cables, data banks and chargers accounted for the rest 11.5% of its collections during FY20.