Click to zoom
But how do entrepreneurs approach him? There are broadly three ways people looking for funding can connect with Tata—through venture capital firms, key Tata group companies and executives who worked with Tata, and in some cases through direct correspondence.
“I wrote to Ratan Tata directly. I got a response from his secretarial team asking us to meet him,” said the founder of a venture who got funded recently. “We met Tata at Elphinstone Building in Mumbai. We were asked to make a presentation. He spent an hour with us; asked pointed, tough questions. He told us in the end that his team would get in touch with us,” this person said, asking not to be named.
In some cases, founders and ventures who are associated with Tata Group companies get introduced by group executives who personally know Ratan Tata. However, his investment decisions are independent of Tata Group’s business plans, said a senior executive at Tata Sons, the group holding company.
For instance, Tata has invested in online-to-offline eye-wear retailer Lenskart, which competes with Tata Group company Titan’s eye-care division. Similarly, Titan recently agreed to pick up a majority stake in online jewellery retailer Caratlane, which competes with Bluestone, a Ratan Tata portfolio company.
Investments via VC firms, new funds
Many startups get introduced to Tata through venture capital firms. Tata is an adviser to three VC firms—Kalaari Capital, IDG Ventures India and Jungle Ventures–and 14 of his 36 portfolio companies have been backed by one of these three firms.
Tata has invested in seven of Kalaari’s portfolio companies, including Snapdeal, Bluestone and Urban Ladder; four IDG portfolio companies including LensKart and NestAway; and Jungle Venture’s portfolio companies Crayon Data, Moglix and SnapBizz.
“It is true that VC firms do make an introduction. However, it is Mr Tata’s own decision whether to invest in a startup,” said another founder who received investment from him. “All portfolio companies (of the VC firm) were called for a meeting with him and he chose to invest in us,” this person added.
Tata has also done multiple co-investments with individual investors such as TV Mohandas Pai, Kris Gopalakrishnan, K Ganesh and Ronnie Screwwala.
Tata and RNT Associates have taken steps in forming a venture capital fund and supported a small debt fund as well. Tata’s fund in partnership with the investment arm of University of California has sought approval from the Securities and Exchange Board of India. The VC fund will invest in startups in India. An email query sent to the chief investment officer of the University of California seeking details did not elicit a response.
Last year, Tata invested in Grameen Capital’s social impact debt funding arm. Earlier in June, Jungle Ventures joined hands with RNT Associates and others to float a seed-stage VC firm in Singapore.
More than just money
Tata typically invests in the range of Rs 1-2 crore. He invested around Rs 2 crore in affordable healthcare venture Swasth India and Rs 1.35 crore in online furniture retailer Urban Ladder, according to VCCEdge, the data research platform of VCCircle. But the range could be wider; he is said to have invested Rs 10 crore in online marketplace Snapdeal and Rs 10 lakh in online lingerie seller Zivame.
Entrepreneurs who have received funding from Tata say his backing is mostly an endorsement of an idea and business model and that has helped many of his portfolio companies attract clients as well as future investments.
“Apart from his investment we will benefit from his expertise and time. His endorsement too will help us in a big way,” Suresh Shankar, co-founder of Crayon Data, said late last year when the startup received investment from Tata.
Indeed, Tata doesn’t bring only money. His experience in leading and building a 100-company conglomerate, his knowledge over a decades-long career and his deep industry connections are what young entrepreneurs a third his age value more.
Like this report? Sign up for our daily newsletter to get our top reports.