Indian Startup Boat Sets Sail for $266M IPO

Indian electronics and lifestyle startup Boat has filed for an initial public offering (IPO) in that country worth up to $266 million.

As Techcrunch reported, the company says it plans to issue new shares of around $120 million and sell shares worth $146 million. One of its backers, South Lake Investment, will sell shares worth $106.4 million in the IPO.

Boat, founded six years ago and worth $300 million following a round of Series B funding in 2021, says it will the proceeds from the IPO to pay off past debts or “prepay” current debts. The company is seeking a valuation of at least $1.5 billion, an anonymous investor said.

Boat sells electronics that include headphones, smartwatches, gaming controllers, battery packs, earphones and fitness wearables — it has captured 30% of India’s wearable market. These items tend to be light on cost and offer trendy aesthetics, helping attract the younger consumers who make up a bulk of Boat’s customer base.

The Techcrunch report notes one possible area of concern: Boat’s reliance on Amazon and Walmart’s Flipkart to sell its products.

“Our primary sales channel is through online marketplaces,” the company said in its filing, with more than 80% of its revenue coming from those marketplaces for the financial years 2019, 2020 and 2021.

“Our arrangements with our top two online marketplaces are on a non-exclusive basis. For a few customers, under our contracts with them, we are obligated to re-purchase or provide additional price support on products that are unsold after a certain period of time,” it said.

Read more: Paytm Shares Plunge to Lowest Level Since November Mumbai Market Debut

The report also points out that Boat’s IPO could represent a test for India’s local market, which has fallen in the past few days amid concerns about rising interest rates in the U.S. and their impact on tech stocks. Four Indian startups that went public last year — Zomato, Paytm, Nykaa and PolicyBazaar — have seen their shares fall in the past two weeks.

Learn more: India’s Snapdeal Prepping for $250M IPO

Last November, Indian online retail giant Snapdeal announced plans for an IPO as high as $250 million scheduled to happen in early 2022.

The company, which competes in the same space as Amazon and Flipkart, had planned to raise at least $200 million with a value of $1.5 billion.