Tata Sons Chairman Emeritus Ratan Tata, who has emerged as a popular angel investor in the Indian start-up ecosystem, says he goes by his intuition and what he feels about the founders while making investments.
“After I retired, it seemed to me that there is a whole new world out there… the digital world, driven by the marketplace that had a huge potential (in turn) driven by handheld devices, which would become the virtual retail store of India. Investing in start-ups is still a learning experience for me,” he said.
Mr Tata was responding to queries from Kunal Bahl, co-founder and CEO, Snapdeal in a fire chat at the TiECON event in Mumbai on Wednesday.
Mr Tata has already invested in two startups this year – Dog-Spot, an online pet shop, and start-up intelligence platform Tracxn. Since 2014, he has invested in nearly two dozen start-ups and tech firms including Snapdeal, Ola Cabs, Paytm, Urbanladder and Xiaomi. He is also working with venture capital firms like Kalaari Capital, IDG Ventures India and Jungle Ventures as an advisor.
Asked what he looks for before investing, Mr Tata said it would be an entrepreneur with an interesting business idea and what he felt about the founders. “Start-ups must have an interesting concept and should excite me. If the founder does not have the passion for the sector or the business he is building, it does not give me a great deal of confidence,” he said.
Mr Tata also said he would extend a helping hand to entrepreneurs who had an interesting idea but are not able to raise money because the business is not ‘sexy enough’ for investors. “I am more intuitive than a numbers person. I also recognise that not all investments are going to be positive; some may have problems for a different reason. So that is life,” he said.
Bahl said 95 per cent of the capital the company has raised has come in after Mr Tata invested in the firm. He also recalled his first meeting with Mr Tata and how he was confident about tackling business-related questions, but nervous about asking for a selfie with Mr Tata.
He said he enjoyed both big deals like Corus and Jaguar and investing in start-ups. He also said the concept of disruption existed even in traditional businesses. “In any business there would always be a small number of people who look to disrupt. They see the opportunity in things not tried before and bet on the future.”
He added: “You have 60-year old people thinking like 40 and 30-year-olds. We also see people at 60 think like 60-year-olds to defend their turf. We are going through a transformation in India. There are one billion phone users, most of them smartphone users. They carry the virtual retail store; this may not be disruptive but revolutionary.”
