Ratan Tata’s undisclosed investment in mobile handset company Xiaomi is the first time that an Indian, in his individual capacity, is investing in a Chinese entity. Xiaomi, the fifth-largest mobile phone maker globally, valued at over $ 45 billion, is the sixth investment in the technology digital space by the 77-year old chairman emeritus of Tata Sons in the last few months. Tata has invested in Snapdeal, Urban Ladder, Bluestone, CarDekho and Paytm—a clutch of companies that are looking to redefine innovation.
It is not clear whether this investment could at a later stage lead to a business relationship with the Tata group. Tata, with his wide experience across industry, will be an able mentor for these young, innovative companies. By investing in young, dynamic and innovative companies, Tata can attempt to do what he could not do successfully with the group’s consumer facing businesses. The Tata group’s consumer companies are not a patch on the young innovation driven companies of today. While the Tata Nano was truly innovative, it failed to make an impact in the market after being perceived as a cheap car. This time round, Tata should not face such problems. Xiaomi could well be the model that Tata follows in his future investment plans. That will be a great fit for both the young-at-heart Tata and the innovation-led outfits.