Good morning [%first_name |Dear Reader%],
You may have read about the data breach at wearables startup Boat. Earlier this month, personal details of 7.5 million customers were reportedly leaked online.
As bad as this is for any company, it was particularly inopportune for Boat. It’s far from the brand I wrote about two years ago. Back then, Boat had just filed to go public. Among the tech startups that had listed, or were planning to list, it was one of only two that were profitable—the other being beauty and fashion retailer Nykaa.
This was a huge deal.
What was even more commendable was that unlike Nykaa, which had managed to turn a profit only the year before its listing, Boat had been in the black for seven years on the trot. In other words, every year since inception.
So Boat was all set to ride the IPO wave to get itself a US$1.5–2 billion valuation. Then came some nasty turbulence in the stock market, and Boat chose to ditch its plans and raise money from its existing investors. It was just as well it did, because public-market investors would have been particularly vicious in response to what followed.
In the financial year ended March 2022, Boat’s profits fell 20% to Rs 70 crore (US$8.4 million). In the previous year, they had surged nearly 80%.
And in the financial year ended March 2023, Boat seemed to have driven off a cliff. It grew its revenue to almost Rs 3,400 crore (US$407 million), but it now had over Rs 125 crore (US$15 million) in losses.
The company explained it away, at least partly, by alluding to its selfless contribution to a much-publicised government initiative.
Boat made its name in headphones and speakers, and it still leads the wireless headphones segment by a distance, but its market share saw a sizeable drop in the quarter ended December 2023.
It’s not fair to expect a company to continue holding on to nearly 40% of a growing market. But there’s also trouble elsewhere.
Boat’s a challenger brand in smartwatches, which it launched in 2020. And it’s losing ground there too.
Boat is atop the wearables market as a whole, but Noise is hot on its heels.
