At the age of 78, Ratan Tata is probably India’s most prolific individual investor in the country’s startup scene, replete with founders in the age bracket of 25-35 years. It’s probably the most fascinating congruence that one can imagine and he is investing in a startup almost every fortnight these days. On Friday, when I ran into the icon, he termed his alliance with startups as a “learning experience”. Many of these startups are making a beeline, not just for his investment, but for his experience and guidance. And not to forget his immense brand value.
A startup founder, in whose company Tata has invested, told me that it is a very special experience to work with him.
It’s not so much about the quantum of the investment, he says. “He adds tremendously to our brand and his experience as an industry captain for decades is so valuable. He’s a great sounding board for us.”
Tata told me over a brief conversation that he has invested very modestly in many of the companies. “Ï don’t want to put a number to it,” he said, when quizzed about the total investment so far into startups. Let’s examine some of his investments.
Snapdeal and Ola have been his biggest indulgence. He is said to have invested R10 crore in Snapdeal and that’s probably his biggest investment in a startup to date. His investment in Ola is under R1 crore. Many of his otherinvestments are well under R50 lakh. Like an entrepreneur said, Ola is a company in which Russian billionaire Yuri Milner has invested in. Ola may not require the money from Tata’s investment vehicle RNT Associates, but it sure seems to like his presence. The same probably holds true for Snapdeal too, in which Softbank is an investor. For smaller firms like Zivame, the online lingerie store, and Kaaryah the women’s wear brand, Tata’s brand value is even more precious. For them, it’s not just an icing on the cake. Having him as a mentor is a huge deal for such players.
Up until now, Tata has invested in 26 startups. He entered some of them at a very early stage, but with many others he came in when the valuations were pretty high. So it does not look like he is trying to time the market. He is willing to invest in a company at higher valuations, if he is convinced. That’s very unlike an angel investor. So here’s where Tata is so different from others. He has positioned himself as a calming influence and a guiding force in a sea of profit seekers.
An aspect to be noted about his investments is the sheer variety of his picks. For instance, his investment in Altaeros Energies which was founded at MIT to commercialise the world’s first airborne wind turbine. He has invested in mobile wallet player Paytm and in Chinese smartphone maker Xiaomi. And then Bluestone, an online jewellery retailer, and a foodtech startup called Holachef. The diverse nature of these startups is remarkable. Tata has also picked out a company called Ampere, which sells electric vehicles and vehicles for the differently abled. Lybrate, a healthcare startup is another. So one can see that his portfolio is a near complete basket. For him, the story is not just about the unicorns.
This kind of long term vision can only from a champion like Tata, who on Friday while at attending an event in Bengaluru, said that the risk of investing in a startup was far less than investing in the stock market. His new initiative, the tie-up with University of California to invest jointly in Indian startups, seems to be a continuation of this kind of approach. In November he had joined as the advisor to the investment head of the University of California. He is looking an investment cycle of over 10 years, indicating that he is not looking for quick fixes.
Tata’s key startup picks
March 2014: Alateros Energies
August 2014: Snapdeal
September 2014: Bluestone
November 2014: Urban Ladder
March 2015: Grameen Capital
March 2015: One97 Communications (Paytm)
April 2015: Xiaomi
June 2015: Kaaryah
July 2015: Lybrate
September 2015: Holachef
December 2015: Urban Clap
January 2016: Tracxn
January 2016: Dogspot.in
January 2016: Cashkaro