Ratan Tata to continue to invest in startups; reveals strategy to invest more on 'intuition' than numbers

  • Ever since his retirement in 2012, Tata has been aggressively investing in Indian startups through his private investment vehicle, RNT Associates

  • On the preferred source of funding for startups, he said, "I hope that the founders would get money from within the country."

  • Several of the startups that Tata has invested has gone on to become unicorns like Snapdeal, Ola, Xiaomi, Zivame, PayTM, UrbanClap, to name a few

Tata Group patriarch Ratan Tata outlined the qualities of a startup entrepreneur in a fireside chat. “I would say what drives entrepreneurs is a fire in the belly to do business better than has ever been done before, and an opportunity to make a difference to benefit society, with the tenacity and courage to see it through,” Tata said.

In a fireside chat at an annual event organised by venture capital firm Chiratae Ventures on the topic, ‘India – A Thriving Entrepreneurial Ecosystem’, Tata spoke about the importance of startups and his strategy to invest in them.

 Ratan Tata to continue to invest in startups; reveals strategy to invest more on intuition than numbers

File photo of Ratan Tata. AFP

Ever since his retirement in 2012, Tata has been aggressively investing in Indian startups through his private investment vehicle, RNT Associates.

"In the years that I was in the Tata Group, I 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. When I retired, I was free of those fetters and started to make small token investments in what I consider to be exciting companies with my own money,” Tata said at an event where he was felicitated with the Chiratae Ventures Patrick J. Mcgovern Lifetime Achievement Award 2019, according to a report in CNBC-TV18.

He revealed his strategy for investment was more a matter of 'intuition' than numbers. Beyond that, he went by the intent of founders, their seriousness to make decisions, he said, according to a report in Business Standard.

When asked about any advice to entrepreneurs, Tata said, “I would say that what probably drives an entrepreneur to start such a business is the fire in his belly that there is a better way to do something than has been done."

On the preferred source of funding for startups, he said, “I hope that the founders would get money from within the country,” as these startups should not get whisked away into being part of a larger entity. “Such companies do grow well. But I find it unfortunate that they are not part of India,” said Tata.

Tata's heart beats for the technology sector. When asked about which sector among startups he would like to invest in, he said: “On the technology side many breakthroughs are happening which is not confirmed to any one sector. There is an opportunity in health care, medical treatment, online space, and manufacturing.”

He said his foray into the startup investment sector was partly by accident and partly by happenstance. Snapdeal was the first investment in an e-commerce firm that Tata invested in. His love for cars and dogs is demonstrated in his investment in startups such as Cardekho, Ola and Dogspot-an an online pet care platform among several others. On Monday, he invested in electric vehicle startup Tork Motors. Tork Motors is gearing up to launch its flagship electric motorcycle in the next few months.

Several of the startups that Tata has invested has gone on to become unicorns like Snapdeal, Ola,  Xiaomi, Zivame, PayTM, UrbanClap, to name a few.

He expressed his desire to invest more in the fledgling sector. “I would like to see my presence grow in the sector based on the funds one has to be deployed. But the excitement of being in the new areas, participating in something that has not been done is the most exciting and absorbing thing. This is something I am looking forward to in the coming years, " he said.

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Updated Date: Oct 16, 2019 09:23:01 IST