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Lifestyle accessories brand BoAt has announced fundraising of Rs 500 crores ($60 million) from major investors while formally withdrawing its IPO plans.
Warburg Pincus, its existing investor, and Malabar Investments, a new investor, are the participants in the round at a valuation of $1.4 billion.
A minimum valuation cap has also been placed as part of the funding round. This means that when BoAt raises more funds, the preferred stock that Warburg and Malabar hold, will be converted to equity at a valuation not lower than $1.2 billion.
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This fundraiser is primarily meant to assist the company in accelerating its plans to ramp up the production of smart watches, as a part of its strategy to shift its focus to wearables from audio devices over 3 years.
The company also has plans to diversify its manufacturing footprint across India with several EMS players in India including Dixon. Moreover, it plans to go global after entering into arrangements with major global companies like Dolby and Qualcomm.
“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 CMO at Imagine Marketing, the parent company of BoAt.
The company had filed its DRHP with market regulators SEBI in January 2022 to raise around Rs 2,000 crores. The same was approved by SEBI in May 2022, paving the way for the company to go public at a valuation of $1.5-2 billion.
The IPO now stands withdrawn as the market conditions are considered "choppy". However, the company has not abandoned its plans to go public, as they plan to continue soon when the markets are conducive.
Article by Aman Agarwal.
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