Imagine Marketing Limited, the parent company of popular wearable brand boAt, has reported its highest-ever revenue of Rs 3,377 crore for the fiscal year ending March 2023. Despite this remarkable achievement, the company, which had been profitable for eight consecutive years, faced a loss of Rs 129.4 crore in FY23. This loss is attributed to the increased costs associated with business development and advertising.
The company experienced a notable slowdown in revenue growth, reaching around 18% year-on-year. This is in contrast to the remarkable 133% average revenue growth achieved over the last three fiscal years. In the preceding fiscal year (FY22), Imagine Marketing reported revenue from operations amounting to Rs 2,873 crore and a profit of Rs 68.70 crore.
In comparison, its closest competitor, the bootstrapped consumer electronics startup Noise, achieved a revenue growth of 80%, totaling Rs 1,426 crore, along with a profit of Rs 88 lakh during FY23. Imagine Marketing, known for brands like boAt, RedGear, Defy, Misfit, and Tegg, faced a challenging financial year despite its strong market presence.
Despite emerging as the second-largest wearable brand globally, boAt encountered setbacks in its IPO bid during FY23. The company, standing as the second-largest player in wearable sales after Apple, reported a robust 75% year-on-year growth in smartwatch and other wearable sales. However, sales of audio and other electronic accessories saw a modest 3% growth during the same period.
According to its annual statements, boAt recorded wearable sales worth Rs 902 crore during FY23, while Noise’s wearable sales reached Rs 1,138 crore in the same period. The Warburg Pincus-backed company allocated approximately 13% (Rs 521 crore) and 6% (Rs 469 crore) of its gross sales to discounts and returns, respectively. An additional Rs 140 crore was devoted to servicing warranty claims, resulting in a significant reduction of nearly Rs 900 crore from its collections before factoring in other operational costs.
Despite these challenges, boAt demonstrated a positive trend in cash outflow from operations, witnessing an almost 82% year-on-year improvement to Rs 64 crore during the fiscal year ending in March 2023. Led by Aman Gupta, a familiar face from Shark Tank who serves as the Chief Marketing Officer, boAt has embraced unconventional marketing strategies, including suspending external advertising efforts during the airing of Shark Tank episodes.
As boAt marks its tenth year of operations, the company is navigating the complexities of growth, transitioning from a consumer electronics marketer to a manufacturer with domestic production capabilities. In May of the previous year, boAt entered into a 50-50 joint venture with electronics manufacturing giant Dixon, commencing manufacturing activities at Dixon’s plant in Noida, Uttar Pradesh. Additionally, the company acquired Singapore-headquartered electronics product development company KaHa in the same month, enhancing its capabilities in IoT devices and audio design processes. According to information sourced by The Captable from annual filings, boAt acquired KaHa’s design house and its Shenzhen-based manufacturing unit for a total consideration of $40 million.
