Boat, an Indian electronics and lifestyle company, has secured $100 million in a recent funding round, widely recognized by numerous investors as a landmark achievement for a hardware startup within the world’s second-largest internet market.

The entire Series B funding was provided by an affiliate of Warburg Pincus, a New York-based private equity firm, for the four-year-old Indian company specializing in affordable, long-lasting headphones, earphones, and various mobile accessories.

This investment values Boat at approximately $300 million post-money, according to an individual with knowledge of the deal. Boat executives confirmed that Warburg Pincus acquired a “substantial minority ownership” in the company, but refrained from commenting on the specific valuation.

One investor, speaking anonymously, highlighted Boat’s unusual success within the Indian hardware startup landscape. Hardware startups are relatively uncommon in India, and those that exist often struggle to attract significant investment. (While companies like Micromax and Lava International could be considered hardware startups, they haven’t secured funding of this magnitude.) Notably, Boat has also achieved a rare feat for a hardware company: profitability, as stated by co-founder Sameer Mehta in a discussion with TechCrunch.

A key factor in Boat’s success is its ability to offer accessories at competitive prices while maintaining an attractive design. The company focuses on a younger demographic seeking stylish accessories at affordable costs, with a tendency to frequently update their devices.

Another contributing element to Boat’s positive trajectory is its opportune timing. The company initially focused on selling charging cables and power adapters, coinciding with a surge in Indian smartphone adoption, with millions of handsets being purchased monthly.

This growth was further accelerated by the launch of Reliance Jio, the telecom network of India’s wealthiest individual, Mukesh Ambani. Jio’s offering of free 4G data for an extended period encouraged millions more consumers to upgrade to smartphones.

According to market research from IDC, Boat holds over 30% of the Indian wearable market and ranks as the fifth-largest brand globally in this sector.

The company reported revenue exceeding $95 million in the fiscal year ending March of the previous year and anticipates a doubling of this figure in the current fiscal year. Boat distributes its products through both online and offline retail channels, including Flipkart, Amazon India, Reliance Retail, Tata Cliq, Croma, and Vijay Sales. Analysts at HDFC Bank estimate that Boat Lifestyle products are available in over 5,000 retail locations across India, with plans for international expansion, which were delayed due to the pandemic.

“We recognize a significant growth potential in boAt and are confident in the company’s ability to build on its strong market leadership and benefit from the increasing trend of e-commerce growth in India. Warburg Pincus is pleased to collaborate with boAt’s leadership team, Aman & Sameer, and we look forward to supporting them in the next phase of the company’s development,” stated Vishal Mahadevia, Managing Director and Head of Warburg Pincus India, in a press release.

Mehta explained that Boat’s marketing approach has also been instrumental to its success. Rather than traditional advertising, the company partnered with prominent young celebrities and cricketers to promote its products. The growing success of these brand ambassadors, such as cricketer Hardik Pandya, has further amplified the impact.

Identifying Boat’s direct competitors is currently challenging. Smartphone vendors like Xiaomi and Realme, which have expanded into accessories, present a competitive threat. Retailers such as Croma, Flipkart, and Amazon have also introduced their own private-label earphones and mobile accessories. Mehta believes the market is currently characterized by overall growth for all players. “Everyone is experiencing growth simultaneously,” he noted.

An investor specializing in Direct-to-Consumer (D2C) brands in India, but not involved with Boat, acknowledged that some Boat customers might consider Amazon Basics products, but cautioned that Amazon Basics doesn’t necessarily represent a premium brand. “Consumers are drawn to Boat because its products convey a sense of quality,” the investor said.

Another investor added that Amazon Basics products are not priced as competitively in India compared to other markets, as Amazon has not yet fully expanded its Amazon Basics catalog within the country.

Boat intends to use the new funding to increase its domestic manufacturing capacity, shifting production away from China, and to broaden its product offerings, including gaming keyboards and mice, according to Mehta.