Boombotix Raises $4 Million Financing Round

new capital infusion allows company to progress wearable audio technologies

This afternoon marks an incredible milestone for the next phase of Boombotix. Today we announced a $4 million strategic investment from new and existing investors. New investors include The Social+Capital Partnership, Baseline, Red Hills, Great Oaks and Grishin Robotics, while existing investors participating in the round include Walden Venture Capital and David Dolby.

Boombotix has spent the last three years developing the highest-quality audio hardware and software products and solidifying its operations. This new investment will enable us to rapidly expand our presence in the market with our unique audio products that combine hardware and software to create a fresh approach to how people enjoy their music.

Since launching in 2010, Boombotix has seen triple-figure sales growth year-over-year. They have shipped a line of speakers called Boombots into national retailers like T-Mobile, Microsoft and hundreds of specialty retailers in action sports and cycling. Since the launch of the Boombot REX, the company has also seen tremendous growth in their online segment with etailers including, Amazon and their own direct eCommerce.

“I’ve had a number of audio devices, but the Boombot design has brought a level of wearability that is unique in a world full of just headphones,” said Ted Maidenberg, partner at The Social+ Capital Partnership. “The Boombotix team continues to show impressive innovation with building an amazing user experience and we are looking forward to amplifying that experience.”

Wearable technology not only has to overcome technical hurtles, but it has to drive trends in fashion and design too. The Boombot REX has been heralded for phenomenal industrial design while blending acoustic performance with software. Boombots have always been a great extension to smartphones. The technologies we are developing are going to continue making mobile audio more accessible and less invasive than ever.

At the end of the 2013, Boombotix launched a mobile app called SYNC on iOS that synchronizes audio content on 4G/LTE networks. This is the first technology that allows users to create synchronized peer-to-peer listening over mobile. This is just part of the new audio listening experience that Boombotix is creating.

The Bluetooth speaker market has seen triple figure growth over the past two years with over 2.2 million units sold domestically in 2012[1]. Boombotix has demonstrated that it has a brand that is commanding strength in strategic verticals that can potentially expand into double-figure market share very quickly.

I’m extremely excited to build out our organization in the upcoming years. We have some challenging execution to perform, but this is truly the opportunity of a lifetime.


The Fear and Excitement of Entrepreneurism

Jason Arens Getting PAID

Making it to the top of the podium takes courage and passion. That never changes. (Skier: Boombotix team rider Jason Arens at VT Open)

Most of the press we see around startups thrives around new funding rounds, exits, mergers and acquisitions.  Sometimes we see speckles of bankruptcy, but usually it is only press worthy when a Goliath figure goes down.  When I started Boombotix, I didn’t think about the private equity market.  Actually take that back.  I didn’t give a shit about private equity or banking.  All I wanted to do was make this awesome speaker.  With my friends and family support, I was able to get a business started.  This is the beginning of digging yourself into a hole in hopes of coming out on top.

Naturally, you are rejuvenated with hopes of success and triumph.  Go ahead and pop a bottle of champagne but just know that the bubbles are short lived.  Getting funding is a very challenging thing for a business.  Getting a hardware company funded is even harder.  More than twenty times more money goes into software.  Why?  Well it’s simple.  Hardware requires more cash to scale.  A lot more.  Building a real brand takes even more cash.  Investment funds of $250 million or less might cringe at the thought of pumping $100 million to build a category.  Fail and that fund is hosed.  Hardware exits are also not quite as glamorous as software.  Investors know that they require more cash, so by nature they also get a softer multiple on trailing revenue.  Some investors even refer to hardware as being “dirty.”  This was completely new to me.  I grew up looking at brands like GoPro and Skullcandy with idolatry.

Despite all this, we are here with a mission.  We are building the most technologically sophisticated ultraportable speakers ever.  This is where the brand values have to be engraved into the organization (forward-thinking industrial design, acoustics, mobility, innovation).  This is when you make the tangible become intangible.  Suddenly you transform from being a hardware company to being a brand with purpose and direction.  When you cross this chasm, investors are no longer looked at as sources of growth capital.  You treat investors as partners to help achieve a grand vision.  The goal embodies more than just making money.  It involves driving change in the world.

Products whether they are tangible, web-based, or mobile are all the driving forces behind change.  Without a great product, you cannot have a great business.  Some of the things we want to build take so many resources that we are forced to manage our wish lists, feature sets, and expectations.  As entrepreneurs, we have to swallow the reality of the current always being less ideal than the future.  Just know that no matter how far into the future your propel yourself, that will never change.  Be sure to find just as much pleasure in looking back on the past, or prepare yourself for a world of pain.

What was I getting at here in the first place?  I don’t want to scare anyone off from starting something.  I just wanted to paint a realistic picture at my view on the world of private equity.  Hardware is hard.  But you like a challenge right?