Updated: Aug 18, 2021
Tata Group has left its signature on each and every industry whether it is telecom, software, fashion or groceries, its presence is there across all the sectors in the country. Hence it not surprising when Ratan Tata entered the list of angel investors for startups. In the years when Ratan Tata was in the Tata Group, he always looked at the startup industry as exciting but untouchable as somewhere or another there would be a conflict of interest with Tata Group in terms of what they did. After he retired, he was free of those shackles and started to make small token investments with his money. Ever since Ratan Tata’s retirement in 2012, Tata has been aggressively investing in Indian startups through his private investment vehicle, RNT Associates. Although Tata is considered dedicated in the business ecosystem, he stressed that investing in startups was a learning process for him as well.
Investment strategy followed by Tata
He revealed his strategy for investment was more a matter of intuition than numbers. He stuck to some of the basic parameters when evaluating investment opportunities. For him, the concept of any business was the key and he invested in only those ideas that excited him. A good impression of the team backing the venture and the intent of founders and their seriousness to make decisions influenced him more than any other factor. He believes that a good entrepreneur is someone who is driven by fire in the belly to do business better than ever and an opportunity to make a difference to benefit society. Tata said that in the startup ecosystem, failure is as synonymous as success as most entrepreneurs end up failing. While he shared his checklist of indicators of failures for new companies he said its the clarity of the founder, the seriousness committed to building an enterprise with someone else’s money and the reality that not every enterprise will have glory all the way through.
Ratan Tata has no major issue with the large cash-burn that startups report month-on-month as he said that they are here to stay indicating venture seed capital funds are the way forward. He has said that when we look at other countries, startups have been there for much longer. He is confident that this sector will grow and it already has proven to be the case and will continue to do that in the coming years. He believes that all Indians are entrepreneurs at heart and opportunity is what is needed to flourish.
Few Investments by Ratan Tata
Tork Motors is a Pune based electric motorcycle startup. Ratan Tata invested an undisclosed amount in Tork Motors in October 2019. He believes that over the years there has been changes in attitude towards electric vehicle and it is a rapid changing industry with a lot of growth potential. The primary reason for his investment was that he saw potential in the company and found the team to be commendable.
Snapdeal was Ratan Tata’s first investment back in 2012. He made an investment in Snapdeal soon after Flipkart's acquisition of Myntra. He bought 256 shares from the e-commerce venture’s angel investors. This move protected Snapdeal from losing market share and also prevented any potential attempt by Flipkart to monopolize the e-commerce segment.
Ratan Tata’s philosophy of building a brand in India coincided with UrbanLadder. He believed in a brand holding everything right from the supply chain to delivery and holding the design internally. Urban ladder was exactly a brand what Tata was looking for, Tata liked Urban ladder’s attention to detail in their design the most and as he himself held a degree in architecture he could relate to the company.
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