Consumer electronics start-up boAt, known for its earphones, speakers and travel chargers, has secured a commitment of Rs 20 crore in venture debt from Flipkart co-founder Sachin Bansal’s fund BAC Acquisitions. The brand will be using the funds for business operations.
In a sector dominated by established global brands such as Apple, Samsung and Bose, the brand has already registered Rs 100 crore in FY2018 as gross sales. The firm said it is eyeing gross sales of Rs 500 crore in the next couple of years. The company was founded by Aman Gupta and Sameer Mehta in 2016 and has grown to a 45-member team with offices in Delhi and Mumbai.
“Venture debt definitely helps us keep the capital structure intact. boAt’s financial performance has been strong since inception,” said Aman Gupta, co-founder of boAt. “Our efficient and lean business model, coupled with targeted business insights, has allowed the brand to enjoy logical margins so that we can earn money and not burn money,” added Gupta.
The company said that the trendy look and feel of boAt speakers and headphones have led to the new category of ‘hearables’, akin to fashion accessories. It has created a community of over 1,200,000 ‘boAtheads’, or consumers. The firm said that every three minutes there is a new consumer being added to the boAt family. The brand sells over 8,000 units per day and, on an average, five units every minute. The products, which are available via online platforms such as Amazon and Flipkart as well as offline retail store chains like Croma and Vijay Sales, are made through contract manufacturing in India and China.
Retail giant Walmart’s acquisition of Flipkart for $16 billion last year not only provided blockbuster exits to its investors but also turned the founders — Sachin and Binny Bansal — into billionaires. Both Sachin as well as Binny are now active in the Indian start-up ecosystem, backing several promising start-ups through their personal funds and family offices.
Besides boAt, Sachin has also made investments in ride-hailing company Ola, smart electric scooter company Ather Energy, vehicle sharing start-ups Vogo and Bounce, and SigTuple, which uses artificial intelligence to aid medical diagnosis.
The Indian appliance and consumer electronics market reached $31.48 billion in 2017, according to India Brand Equity Foundation (IBEF). It is expected to increase at a nine percent CAGR to reach $48.37 billion in 2022. Electronics hardware production in the country reached $60.13 billion in FY18, growing at a CAGR of 26.7 percent between FY14-18. Demand for electronics hardware in India is expected to reach $400 billion by FY24, according to IBEF.―Business Standard