BoAt Sinks, Noise Floats

Hey there,

On one hand, boAt sunk into ₹100+ crore losses.

On the other hand, Noise scored funding from Bose.

Same sector, radically opposing results. 🤯

A closer look at their financials, expenses, and future to know who is winning the Audio race in India 👇️ 

For context, boAt Lifestyle, started by Shark Tank Judge Aman Gupta, was founded in 2013 and remained profitable ever since until FY23. In contrast, Noise, started by the Khatri brothers in 2014, has been profitable for years while bootstrapping and is now seeking funds to fuel its rapid expansion.

Now, let's take a closer look at these different aspects to see where these both companies stand.

1) Financials:

👉 boAt: boAt earned ₹3350 Cr in FY23. However, it slipped into the red for the first time since its inception, reporting a net loss of ₹129.4 crores compared to a profit of ₹68.7 crore in FY22

👉 Noise: Meanwhile, Noise saw its operating revenue jump 1.8X to ₹1,426.5 crore, up from ₹792.8 crore last year. Consequently, Noise logged a 39.4X decline in its net profit to ₹88 lakh in FY23, down from ₹35.5 crore in FY22.

2) Funding:

👉 boAt: boAt has raised over $171 million to date across various funding rounds.

👉 Noise: Traditionally bootstrapped, Noise is now exploring a $40-50 million Series A round, with Bose as its first external investor.

3) Market Share:

👉 boAt: boAt continues to lead the broader wearables market in India with over 30% market share, while Noise stands at second place with around 14% share.

👉 Noise: However, Noise leads in the smartwatch category, commanding roughly 27% of the market share, with boAt quickly catching up.

4) Major Expenses:

Despite strong revenue momentum, profits dipped for both firms. boAt slipped into losses for the first time, while Noise saw a 39X year-over-year profit decline to ₹88 lakhs.

Major expenses included a 3X rise in marketing costs. Additionally, both companies invested heavily in building R&D centers, offline retail stores, and inventory.

5) Future Outlook:

👉 boAt: To drive future growth, boAt has partnered with Jio to offer wearables integrated with telecom services. This could help boAt regain some of its lost market share.

👉 Noise: Noise is leveraging the Bose investment to eye international expansion opportunities by tapping into Bose's distribution network and R&D capabilities globally.

In summary, the current situations of boAt and Noise make it challenging to determine who is ahead. However, it shows that two companies can employ very different processes and still make a huge impact.

✍️ Jargon of the day

R&D:

Research and development (R&D) refers to the work startups do to make improvements and create new products. This involves understanding customer needs, generating ideas, building prototypes, and testing concepts.

R&D is crucial for startups to stay innovative and competitive in the market. With strong R&D, startups can invent better solutions, take on new challenges, and keep delivering value as they grow

Loved this edition? Or have some thoughts to share? We'd love to hear from you

Cheers,
Karthik