Tata has in the last three years invested in 29 startups out of which at least four are unicorns, unlisted startups valued at over $1 billion.
MUMBAI – Tata Sons chairman emeritus Ratan Tata has taken up an altogether different avatar after hanging his boots as chairman of the $100-billion group in December 2012.
Tata held that position for 21 years and pulled off some of the biggest global multi-billion dollar deals for the group. He now seems to be more excited in investing a few lakhs in projects that excite him without the trappings of the stock market or answering pesky questions from faceless shareholders.
Tata has in the last three years invested in 29 startups out of which at least four are unicorns, unlisted startups valued at over $1 billion, through RNT Associates, in which he holds majority shares. Two months into 2016 and he has already announced his sixth investment for the year.
So who gets Tata’s money? Tata dropped a few cues at a recent open house for startups in Bengaluru. “I am always additionally excited when an idea can, in its fulfilment, make a difference in a way that it either brings prosperity to a part of the community or enhance the quality of life of a certain segment. The other is where you do something game changing —this is extremely invigorating. To me, it’s much more than the returns you have,” he said.
While the entrepreneurs are taking pride in Tata investing in their startups, he himself thinks he has a lot to learn. “At this point in time I would not like to have a discussion on my investments in startups. As I have stated more than once, I am in a learning phase in this activity,” Ratan Tata told HT in an e-mail reply.
“For us it is not about the money but the vision he brings with him which helps us to take a rounded approach. He always guides us at operational as well as the strategic level with whatever little time he is able to take out of his busy schedule,” said Ankur Pegu, founder and CEO of Swasth India, a startup which focusses on cancer treatment and health data analytics. Tata picked up stake in Swasth India last year.
Tata generally does not take big stakes in companies and has also made many early-stage investments.
Tata’s investments in start-ups not only gives them publicity but also adds certain amount of credibility to the brand which is evident in the increase in valuations of these start-ups when they go in for successive rounds of funding.
“The value of investments in many cases is quite small per se. But getting it from Ratan Tata pushes up the goodwill of the business.” said an entrepreneur who recently convinced Tata to cut a cheque.
It is not about small companies only. Even big startups such as Snapdeal, Ola and Paytm are consider Tata’s involvement valuable. “It was a great experience to have Ratan Tata as an investor. As we want to build a company that Indians trust, Tata is perhaps the best person to be associated with,” said Vijay Shekhar Sharma, founder and CEO of Paytm, India’s largest mobile wallet company.
Out of Tata’s 29 investments, Paytm has seen the biggest jump in share valuation after receiving funds from him.
Tata investment interests are not limited to India alone. Interestingly, his first startup investment was in Boston-based wind energy startup Altaeros Energies.
Xiaomi, China’s largest smartphone maker, already a big name in India has also got funds from Tata. His most recent foreign investment was in Singapore-based startup Crayon Data, a big data analytics firm.