Fortune India TheNext500: ‘Building blocks to go global next year’, says boAt’s Aman Gupta

Homegrown earwear audio-tech brand boAt is building blocks to become a Made-in-India global lifestyle brand and plans to tap the international market by next year, says Aman Gupta, Founder and CMO, at Fortune India’s TheNext500 event on Friday.

“This year the company will focus on India, which itself is a huge market, and going all out is next year’s vision. We will try and test smaller global markets such as Bangladesh and UAE,” he says.

“We don’t want to be in a situation where we start in 100 countries and close in 99 countries; hire 2,000 people and fire 1,500. We want to do it easily at our own pace as the company is heavily capitalised and doesn’t need crazy capital. Our demand is more than supply in India,” he says at the TheNext500 event.

Founded in 2016, the Delhi-based startup has become India's largest earwear audio brand and the world's 5th largest. It has also solidified its position in the Indian market by capturing the majority of the market share.  

According to Gupta, boAt has around 40% market share in audio products. “We have just entered wearables as a segment to make distinctive products. We have made a brand in India and are now making products in India and will soon start exports out of India.”

Speaking about the company's "Make in India" journey from being a brand that imported from China to sourcing and manufacturing in the country, Sameer Mehta, co-founder of boAt, says the company shifted the majority of its manufacturing to India to get complete control over products as well as to avail of the government's proposed production linked incentive (PLI) scheme for wearable makers.

In January last year, the consumer electronics company formed a joint venture with Dixon Technologies to boost the manufacturing of boAt wireless audio products in India. “We set up a 2.5 lakh square feet factory in Noida and this year we are making around 30 million devices. Till last July, only 1% of our products were manufactured in India and today it has reached 75%,” Mehta said.   

Speaking on the funding winter for Indian startups, Vikram Chogle, MD, Warburg Pincus India, says the firm has been investing in India for the past 25+ years through the ups and downs of market cycles. "We have always taken a very long-term approach to our businesses, so the view has not changed for the large part.”

“As an investor, the two elements which are becoming increasingly important are firstly, finding business models that are truly resilient and don’t require constant capital or access to funding markets for success, and secondly, backing entrepreneurs and management teams who can deal with the complexities of today’s macroeconomic uncertainties such as high inflation, increasing interest rates, and geopolitics, and be agile given that environment."

Recently, boAt Lifestyle raised ₹500 crore ($60 million) from its current investor, Warburg Pincus, and a new investor, Malabar Investments, to ramp up its footprint with a fresh round of investment.

The fresh round of funding came at a time when boAt was mulling over launching an IPO after it was allowed to raise ₹180 crore before getting listed. As a consequence of the fundraising and in compliance with SEBI regulations, the company withdrew its draft red herring prospectus (DRHP) filed in January to launch an IPO worth ₹2,000 crore this year. 

The company is looking to file a fresh IPO with SEBI after reassessing the situation in the next 12-18 months. The D2C electronics and wearables startup has officially said it intends to go public “once we have scaled up our wearables business and when financial markets improve".

For the financial year ending March 2022, boAt Lifestyle reported a 118.67% jump in its revenue from operations, while its profit dropped by 20.6%. The revenue from operations stood at ₹2,873 crore in FY22 as against ₹1,314 crore in FY21, while the profit was ₹68.70 crore versus ₹86.50 crore a year ago, as per Registrar of Companies.