The chairman emeritus of the $110-billion salt-to- software Tata Group, arguably one of the most successful investors of all-time, was an early backer of Ola, and Paytm since 2015 when he made these investments in personal capacity. He also has a small stake in One97 Communications that owns Paytm, and took on the role of an advisor to the firm. He made his maiden ecommerce investment in Snapdeal.
Tata’s other top investments in the startup space include fitness startup CureFit; weather forecaster ClimaCell; auto portal CarDekho; online furniture mart UrbanLadder; e- tailer of eyewears Lenskart; home rental platform NestAway; and online pet care platform Dogspot. Investment in Dospot is not surprising given his fondness for the canines, which he has many. Tata carries out these investments through his personal investment firm RNT Associates.
“I entered the startup investor partly by accident. During the years that I was with the Tata group, I always looked at the startups as a sector that is exciting but somewhat untouchable because somewhere there will be conflict of interest with Tata Group,” he said.
“But when I retired I started making small token investments from in what I considered exciting companies. So, what I did was to take some more risks than I might have taken under different circumstances. With two-three years into this, it became a learning experience, as this sector is very active and has the best minds,” said Tata adding, “contrary to common belief my pocket is not so deep.”
Listing out his rationale for the companies he has invested in or advising on, Tata said, the promoters’ fire in the belly, ideas and the solutions they offer are the drivers of his investment decisions. “In my case it was intuition, in fact talking to the founders, drawing conclusions from their attitude, maturity and their seriousness meant more to me than any other thing,” said the 81-year-old.
Tata is not worried over the large cash-burn that startups report month-on-month, saying they are here to stay, indicating venture seed capital funds are the way forward. “Look at other countries, startups have been there for much longer. This sector will grow,” he added.
When asked what is the right time for a startup to go global, Tata, who has taken the group companies on an overseas acquisition spree in the last two decades as the chairman of the group, quipped, “I don’t think there is a right time. It is for the founder to determine whether going global will give him or her an opportunity to expand the market.”
Whether he will encourage other business families to emulate his proclivity, and he said, “I think it will come naturally. You cannot force them. It comes from the success the sector has.” Tata would like to see his presence grow in the sector based on the funds he has deployed. “But the excitement of being in new areas, participating in something that has not been done is the most exciting and absorbing thing. This is something I am looking forward to in the coming years,” he smiles again.
When asked about his areas for investments, Tata replied, “On technology side many breakthroughs are happening which is not confirmed to any one sector. There is opportunity in healthcare, medical treatment, online and manufacturing.”
“I am glad the startup space is growing and becoming so prominent. Now more and more big companies will recognise that there is another way to do something and that something might be the better way to do cheaper and most cost-effective way,” he said.
“After all Indians are entrepreneurs at heart. What we need is opportunity to flourish. And I think startups are doing just that. I wish them all success,” Tata concluded.