Godrej Setting Up Family Office To Invest In New-Age Businesses

SUMMARY

The family office would start with a corpus of a few hundred crores and raise funds when opportunities arise

The move comes after Godrej’s consumer products arm was investing INR 100 Cr to anchor the early stage fund Early Spring

Godrej’s family office and investment plans also come as Indian startup funding plummeted 66% YoY to $888 Mn in April 2023

The promoters of Indian conglomerate Godrej Industries are setting up a family office to invest in new-age businesses.

According to a report by Mint quoting Nadir Godrej, the family office will commence its operations with an initial corpus of a few hundred crores, and will raise additional funds as opportunities emerge.

“We are in the process of setting up a family office. Because we have a very diversified business, we usually invest through the businesses,” Godrej was cited as saying.

The move comes around two months after reports of Godrej’s consumer products arm’s plans to invest INR 100 Cr to anchor the early stage fund Early Spring (launched by Spring Marketing Capital) came to light.

Founded by Raja Ganapathy, Arun Iyer and Vineet Gupta, Spring Marketing Capital invests in companies at the Series A level and beyond. With Early Spring, Godrej is looking to create a portfolio of 15-20 startups at the pre-Seed to Series A stages.

Though, having partnered with Spring Marketing Capital (INR 300 Cr fund) would not entail the same amount of autonomy as would come with an independent fund. Thus, a move towards consolidating its early-stage bets under a family office makes sense for the conglomerate.

The family office will be overseen by Adi Godrej’s son, Pirojsha.

In the past, Nadir has invested in some companies in a personal capacity, including traditional beverages and foods brand Paper Boat’s parent company Hector Beverages.

The move from the conglomerate comes as there has been increasing interest from major Indian businesses to bet big on Indian startups. The likes of Wipro, Tata, Reliance and Infosys have made significant bets on India’s startup ecosystem over the years.

Godrej’s family office also comes against the backdrop of a prolonged funding drought that India’s startup ecosystem is going through. According to Inc42’s ‘Indian Tech Startup Funding Report, Q1 2023’, Indian startups raised only about $3 Bn in the first quarter of 2023, down 75% compared to the year-ago period.

Similarly, Indian startups could only raise $888.45 Mn in April 2023, down 66% compared to April 2022, when Indian startups had raised $2.6 Bn in funding.