boAt, founded by Aman Gupta and Sameer Mehta in 2015, achieved remarkable sales milestones in the fiscal year ending March 31, 2023.
The Delhi NCR-based startup specializing in audio products and smartwatches surpassed the INR 3,000 Cr mark, with operating revenue reaching INR 3,376.7 Cr, representing an 18% increase from the previous fiscal year’s figure of INR 2,873 Cr.
boAt operates in the expansive audio and wearables markets, offering a diverse range of products such as headphones, smartwatches, and speakers.
In FY23, the audio segment accounted for INR 2,350.8 Cr, constituting 70% of the total operating revenue, while the wearable segment contributed INR 901.5 Cr.
Including other income, boAt’s overall revenue for FY23 stood at INR 3,403.1 Cr, a significant rise from INR 2,886.4 Cr in FY22.
However, for the first time since its inception, the startup reported a net loss of INR 129.4 Cr in FY23, contrasting with a profit of INR 68.7 Cr in FY22.
The surge in expenses outpaced the increase in sales, leading to a total expenditure of INR 3,562 Cr in FY23, marking a 28% increase from the previous fiscal year.
Notably, the primary expenses for boAt included a substantial procurement cost of INR 2,526.8 Cr for raw materials, comprising 71% of the total expenditure.
Advertising expenses saw a significant spike, reaching INR 427.6 Cr, a 332% increase from INR 99 Cr in FY22, while employee benefit expenses also surged by 77%, amounting to INR 99.4 Cr.
The EBITDA margin for boAt deteriorated from 4.98% in FY22 to -1.6% in FY23. However, despite the financial challenges, boAt has been actively involved in the ‘Make in India’ initiative, manufacturing over 30 million units in the country since early 2022.
boAt’s profitability in FY23 was impacted by investments in seeding the smartwatch category and expanding its ‘Make in India’ infrastructure.
The startup, which had filed for an IPO in 2021, postponed its plans due to market volatility.
With a total funding of $177 million from investors like Qualcomm Ventures, Warburg Pincus, InnoVen Capital, Navi Technologies, and Fireside Ventures, boAt competes with other startups such as noise, Leaf, and mivi in the Indian market.
Marking A Milestone
boAt, under the leadership of Aman Gupta, the co-founder and Chief Marketing Officer, is also poised to achieve a remarkable revenue milestone of Rs 4,000 crore this year.
Gupta attributes boAt’s success to a steadfast focus on the core principles of marketing, particularly emphasizing the 4 Ps – product, price, promotion, and place.
boAt, having disrupted the hearable and wearable industry, swiftly ascended to the top position in India and secured the second spot globally.
Gupta credits this achievement to tapping into India’s extensive population and recognizing the immense market potential.
He stated the company’s commitment to maintaining a competitive edge by consistently introducing vibrant and distinctive products that align with consumer trends.
Gupta highlighted the effectiveness of their strategy, which involves frequent product launches, especially in the watch segment, as a key driver of boAt’s sustained growth.
Discussing the impressive revenue progression, Gupta noted that boAt earned Rs 10-15 crore in its first year, reached Rs 30 crore in the second, and crossed the Rs 2,000 crore mark in the last fiscal year.
The company is now set to double this figure with a projected revenue of Rs 4,000 crore for the current year.
boAt’s success is deeply rooted in adhering to the fundamental principles of marketing, with a keen focus on product development, pricing strategies, effective promotion, and strategic placement in the market.
Gupta emphasized the significance of brand aspiration in India’s flourishing aspirational market, where consumers express strong affinity for the boAt brand.
Regarding investors, Gupta mentioned that Kanwaljit Singh from Fireside Ventures invested Rs 7 crore, and the company has successfully returned Rs 100 crore to him.
On the topic of an IPO, Gupta indicated that it might come to fruition within the next 1-2 years.
Addressing employment, he shared that boAt currently employs 6,000 people directly and indirectly, with plans to increase this number to 20,000 people in the near future.