“Wearable tech startup GoQii backed by Tata.”
This headline was carried by several media firms in the first week of October 2016. Perhaps, this was also the last, the startup community heard from Ratan Naval Tata. However, as per a recent report by ET, the Chairman Emeritus of Tata Sons has announced his intentions to invest again in Indian startups.
“When I retired in 2012, I hit upon investing and interacting with startups as a new phase. I left the big business behind. I became excited by the innovation, passion. It stimulated me. The last five months have put me forcibly in the older world. I long to be back in the startup community with a vigour,” he said.
The Cyrus Mystery
Cyrus Mistry took over as Chairman of Tata Sons after the retirement of Ratan Tata. He was associated with the board since 2006 and has been destined to the throne as a family heir. His father, was on the board of the company since 1980, who stepped down in 2004.
First seen as the potential young candidate to lead the group, Mistry was soon perceived as “insolent, precocious and out to destroy the core values that the group stood for, for close to 148 years,” as mentioned by an ET author. By August 2016, the fundamental disconnect between Mistry and Tata became an open secret and on October 24, 2016, he was pulled down from his position as the Chairman.
This forced Ratan Tata to take over as an interim Chairman to resolve internal conflicts and take necessary actions to resolve them. On February 7, 2017- Cyrus Mistry was finally ousted by the board. The very same day Tata announced that he will now handover the reigns to N Chandrasekaran, the now CEO and managing director of Tata Consultancy Services. As per reports, he will be back with his startup adventure from February 23, 2017.
The Investments To Date
Since 2013, Ratan Tata has emerged as a one-man venture fund when it comes to startup investments. With each passing year, the investments and the number of startups grew manifold, embracing funding from his personal wealth. Although, the amounts in majority of the investments remain undisclosed, for a few it has been revealed to be around $297K (INR 2 Cr). Although, the amounts may seem to be a bit on lower side, but as many startup founders believe, the association with Tata has other perks along with the funding.
For instance, soon after the investment by Ratan Tata, the share prices of almost all firms surged by more than 20%.
In past three years, he has made more than 30 investments including both Indian and foreign startups. While he debuted in 2013 with investment in healthcare startup Swasth India, the list soon included Indian unicorns Snapdeal, Ola, and Paytm.
With almost all sectors touched – be it ecommerce, analytics, gaming, real estate and more – surprisingly, the logistics has not been on Tata’s list yet. With around 14 investments in 2015 and 16 in 2016 (of which 10 were done in January alone), the return of Ratan Tata in 2017 can make startups gear up their pace.
Here is a brief snapshot of Tata’s investments to-date in Indian startup ecosystem.
Other Investments And Initiatives
Globally, he has invested in companies such as China’s Xiaomi (April 2015), Singapore’s Crayon Data (November 2015), Saratoga, CA’s Abra (October 2015), San Francisco’s MUrgency (May 2016), US-based Altaeros Energy (March 2014), US-based Plutus Financial, and US-based Sabse Technologies (November 2015).
Apart from these investments, Ratan Tata earlier revealed his plans to set up a venture capital fund, in partnership with the University of California, with a corpus of around $100Mn-$150 Mn. In February 2016, Ratan Tata’s investment firm, RNT Associates, partnered with the University of California to jointly fund startups over the next 10 years in India. Also, he is associated with three other venture capital firms, IDG Ventures, Kalaari Capital and Jungle Ventures, as an advisor.
In December 2015, Tata Trusts partnered with US-based non-profit organisation Khan Academy to provide online vernacular content for students in India, based on NCERT textbooks. In August 2016, there was also an announcement by RNT Capital Advisers, to deploy $300 Mn across startups in India, Southeast Asia and the US.