Indian lifestyle and electronics startup File of boats for an IPO - TechCrunch

Indian lifestyle and electronics startup File of boats for an IPO – TechCrunch

Imagine Marketing, the holding company of electronics and lifestyle brand Boat, one of India’s rare hardware startups, has filed for an IPO of up to $ 266 million.

On Thursday, in the DRHP filing with the local regulator, Boat, backed by Warburg Pincus, said it plans to issue new shares worth approximately $ 120 million and offer $ 146 million worth of shares for sale. South Lake Investment, one of Boat’s backers, plans to sell $ 106.4 million worth of shares in the IPO, the filing said.

The six-year startup, which was valued at $ 300 million in its Series B round a year ago, said it plans to use IPO procedures to pay off its past debts or “prepay” current debts. It is looking for a valuation of $ 1.5 billion or more in the initial public offering, according to one of its investors, which requested anonymity sharing of private matters. (The sought-after rating was previously reported by local media.)

The boat “manufactures” and sells a range of electronic products such as headphones, fitness wearables, smartwatches, game controllers, charging cables, portable battery packs, earphones and other mobile accessories. The low cost and premium aesthetic offerings of these devices have helped it woo young people, who make up the bulk of its customer base.

The boat has expanded into several categories over the past few years and followed the same strategy that made it stand out in the first place. Its fitness wearable device starts at under $ 25, AirPod-like smartwatches and earbuds for under $ 30, charging cables for $ 3, home theater soundbar for around $ 50, wireless speakers for just over $ 10, and headphones for $ 5.50.

In the filing, Boat said it relies on a number of contract manufacturers to manufacture its products, including those in the audio, wearable, personal care and other categories.

“We rely on these contract manufacturers to manufacture our products and our contract manufacturers, in turn, rely on third party suppliers for many of the components used in our products. For the fiscal years 2019, 2020 and 2021 and the semester ended September 30, 2021, ₹ 1,160.92 million ($ 15.4 million), ₹ 3,408.33 million ($ 45.3 million), ₹ 7,176.18 million ( $ 95 million) and ₹ 9,910.81 million ($ 131.8 million), or 57.79%, 69.34%, 57.19%, and 60.73% of our stock-in-trade purchases were carried out respectively by five of our most used suppliers, “he said, adding that a potential geopolitical tension between India and China could affect the startup’s business.

Also potentially concerning is Boat’s heavy reliance on third-party markets Amazon and Flipkart to sell its items. “Our main sales channel is through the online markets and for the financial years 2019, 2020 and 2021 and the six-month period ending September 30, 2021, 85.11%, 86.26%, the 85.84% and 83.24% of our transaction revenues were derived from online markets and 78.59%, 81.35%, 83.72% and 75.02% of our revenue from transactions derive respectively from our two main online markets, “the document reads.

“Our agreements with our two main online marketplaces are not exclusive. For some customers, under our contracts with them, we are obligated to repurchase or provide additional pricing support on unsold products after a certain period of time. “

According to market research firm IDC, Boat controlled more than 30% of the wearable device market in India and was the fifth largest global brand in the category early last year.

The startup’s initial public offering could prove to be a test for the local public market, which has plummeted in recent days as investors around the world worry about rising US interest rates and its implications for tech stocks. Shares of four Indian tech startups – Zomato, Paytm, Nykaa and PolicyBazaar – that went public last year have declined in the past two weeks.

Other interesting ideas from the deposit:

  • The founders – Sameer Mehta and Aman Gupta – own 56.5% of the company’s capital.
  • The startup made a profit of $ 15.75 million on revenue of $ 206 million in six months ending September 20, 2021.

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