Bollywood stars Alia Bhatt, Katrina Kaif among celebrity investors betting big on startups – Economic Times
Chin up, startups. Simply when non-public fairness and enterprise capital investments in giant Indian startups have hit a four-year low, one other set of buyers are doubling down on rising startups and direct-to-consumer (D2C) manufacturers like by no means earlier than – celebrities throughout Bollywood and sports activities.
Sustainable child care model SuperBottoms on Thursday introduced Alia Bhatt as its investor. Earlier this month, Parineeti Chopra acquired a minority stake in private care model Clensta, former cricketer Sourav Ganguly picked up a stake in meals supply startup JustMyRoots, and Suniel Shetty invested in do-it-yourself healthcare enterprise The Biohacker.
Executives count on the development to proceed. It is a win-win proposition, they mentioned, with these principally consumer-facing startups getting a face to push their manufacturers in addition to the cash, and celebrities getting a low-risk, high-potential funding alternative.
“At a time when conventional established funds is probably not investing with as a lot frequency, what’s working for actors or sports activities celebrities as particular person buyers is that these new companies are low-scale, low-risk, and don’t require giant funds. Therefore, we’re seeing a number of mid-sized endorsements shifting to possession,” mentioned Manish Porwal, managing director at a expertise administration and advertising firm Alchemist, which works with L’Oréal and Reliance Group.
ETtech“This development will escalate,” mentioned Kannan Sitaram, accomplice and cofounder of early-stage enterprise fund Hearth Ventures. “For celebrities, such investments are strategic offers which repay in lots of multiples in the long run.”
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Hearth Ventures has invested in numerous D2C manufacturers similar to Traya, Slurrp Farm, The Sleep Firm and Pilgrim. “Whereas general investments in startups have come down, we proceed to see lot of traction within the D2C area,” Sitaram mentioned.
Different such offers prior to now quarter embody Sanjay Dutt investing in alcobev startup Cartel & Bros, D2C well being meals maker WickedGud elevating Rs 2.25 crore from Shilpa Shetty, Katrina Kaif investing in well being and wellness platform Hyugalife, Suniel Shetty choosing up stake in edtech agency Klassroom Edutech, and Good Glamm group establishing a three way partnership with Akshay Kumar to promote private care and wellness merchandise for males.
“For the mid-sized startups and D2C manufacturers, it really works rather well…since they get star energy for his or her new rising manufacturers, and offers don’t at all times contain solely financials since they embody endorsements,” mentioned Vinita Bangard, founding father of expertise administration firm Krossover Leisure.
She mentioned presence on digital and social platforms like Instagram and Twitter are key benefits the celebrities carry to rising manufacturers, which might in any other case require long-term funding and scale.
This comes at a time when startup funding has slowed down and a few bigger startups are going through governance points.
The Indian startup ecosystem reported the bottom funding within the final 4 years throughout January-June 2023, at $3.8 billion throughout 298 offers, a decline of 36% in comparison with July-December 2022 which had seen cumulative funding of $5.9 billion, PwC mentioned in a report earlier this month.
The accounting big attributed the decline to extend in due diligence by bigger established buyers earlier than making investments each when it comes to detailing in addition to protection – from typical finance and authorized, to areas like know-how, HR and enterprise processes.
Virtually all of the movie star funding offers are structured such that the celebrities additionally endorse the manufacturers, and therefore, the manufacturers don’t want to rent exterior names to chop by means of muddle within the classes the place they’re competing in.
Chopra introduced her first strategic funding on her Instagram web page, stating: “I’m (lastly) attending to do one thing that I’ve been desirous to do for 4 years however wanted the proper crew to do it with.”
Porwal of Alchemist mentioned, “For the celebrities, it’s additionally about creating hedge fashions for his or her private profession development at a time when motion pictures have a lot shorter shelf lives and there’s an inflow of social media and micro influencers who manufacturers rope in for endorsements typically at one-tenth the charges.”
Whereas Deepika Padukone, Priyanka Chopra Jonas and Virat Kohli have backed a number of early-stage and growth-stage startups and D2C manufacturers for a while now, the development has escalated to a brand new excessive with magnificence and vogue, edtech, meals and health being the sectors with the biggest investments.
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