Ratan Tata, Chairman Emeritus of Tata Sons, on Thursday said that he would consider investing in young and dynamic startups than in large enterprise as the challenges associated in startup funding was lesser than investing in complex entities.
Mr. Tata, who has invested in 25 startups in the country, said that the quality of the founders, their passion and the concept were more relevant while investing in these startups.
“The challenge in investing in a startup is less than investing in stock market systems. At the same time, the risk profile could be higher. In my view, the risks and difficulties involved with startups are less in magnitude than investing in a major company that has got millions of rupees tied up in a new project,” he said.
In his personal capacity, Mr. Tata has invested in Snapdeal, Ola, Xiaomi, Kaaryah, Bluestone.com, Teabox.com, Urban Ladder, Alteroes Energies, among others.
Asked about the government’s move to provide financial supports for startups, he said that it would help the ecosystem and was a good initiative. But, Mr. Tata said that it would not solve the various problems faced by startups in the country.
“I do support the government. Though it has not completely spelt its plans, it is giving is a good thing for the startup industry. It is not going to provide all the answers but it is going to provide some support.”
Replying to a query on his investments in startups, Mr. Tata said, “My investments are relatively small and are private. The public announcements of my investments in an industry that I am learning really cringes me.”
Earlier, he announced his partnership with the University of California’s (UC) Office of the Chief Investment Officer (CIO). Through the partnership Mr. Tata’s private company and UC CIO would invest in companies in sectors such as e-commerce, health, payment, financial services, among others.
In December, the UC CIO appointed Mr. Tata as a senior advisor on international policy, including investment opportunities and strategies in Asia.
UC’s fund is around $91 billion which includes portfolio of retirement, endowment, and cash assets. According to reports, UC CIO is planning to invest up to $1 billion in the Asian market over the next three years.
