Donning the investor hat, Bollywood style

Celebrities such as Deepika Padukone, Priyanka Chopra, Suniel Shetty are no longer just endorsing products or brands, they’re getting into the business, making angel investments or taking sweat equity

Donning the investor hat, Bollywood way

While some startups are bootstrapped for cash, others seek external funding to help with operating costs and growth plans. Indian start-ups seem to be fast becoming the go-to-destination for Bollywood to park their monies. Celebrities no longer just endorse products or brands, they’re jumping right into the business, making angel investments or taking sweat equity. Most work with professionals, relying on the latter’s business acumen and experience to make a go of it.

The latest name to be added to the list is actor Deepika Padukone, who entered into a multi-crore strategic partnership with Mumbai-based FMCG health-food brand Epigamia. Padukone joins the elite club of celebrity investors in India, which includes the likes of Arjun Kapoor, Suniel Shetty, Amitabh Bachchan, Priyanka Chopra, among others.

On May 14th, the Padmaavat actor announced a major deal with Drum Foods International through her strategic initiative arm, KA Enterprises. The star owns All About You, a clothing label for online shopping site Myntra, and has funded startups such as online furniture rental platform Furlenco and beauty products marketplace, Purplle. In 2018, she became the first woman to make it to the top five of Forbes India’s annual list of India’s highest earning celebrities. As of 2018, she endorsed over 20 brands and had a brand value of $102.5 million (Rs 720 crore), according to a celebrity brand valuation report by US-based consultancy firm Duff and Phelps. Padukone is also the latest among many Bollywood celebrities to fund startups and ventures.

According to Jagdeep Kapoor, CMD, Samsika Marketing Consultants says that such kind of investments from celebrities help both the brand and the actor. “Actors are also interested in growing their wealth. They work very hard to get good earnings. Now they want their earnings to earn for them and grow their wealth. Growth is meant for them, whether through entertainment or through investment. Start-ups are a good avenue for revenue. Apart from their role as actors, they are playing the role of intelligent investors. This trend is bound to grow because of their desire to grow,” said Jagdeep Kapoor, CMD, Samsika Marketing Consultants. 

Before Deepika donned the investor hat, actor Arjun Kapoor announced his investment for a home food delivery company Foodcloud.in, which will be empowering women.

"My aim at investing in Foodcloud.in is to contribute towards a larger societal purpose - of empowering the homemakers to contribute towards their family income," Arjun said in a statement.

"It not only boosts household income leading to a better lifestyle but also drives gender parity for the woman at home or in her neighbourhood. To me, that's a tiny step towards parity, towards empowerment in society at large," added the "Ki & Ka" actor, who has always supported equality for women.

Filmmaker, actor, and singer Farhan Akhtar in 2015 invested in film discovery app Flickbay.

Food and fitness seem to be a common theme in most Bollywood-backed startups. Pune-based online fitness community SQUATS recently announced that actor-producer Suniel Shetty has invested an undisclosed investment in the company.

Saurabh Uboweja, International Brand Expert and CEO of Brands of Desire said, “Celebrities are high net worth individuals and like most HNIs, they are looking to invest their surplus income into assets. This was earlier restricted to traditional asset classes like real estate, stocks or funds. Many of them started their own businesses earlier, such as restaurants or cafes. This kind of investment carried very high risk as celebrities don’t have sufficient experience setting up or running successful businesses.”

In 2018, Priyanka Chopra funded social networking app, Bumble and became its brand ambassador while also serving as its adviser. That’s not all, actor Amitabh Bachchan has invested in local search service platform Just Dial. In 2015, he also invested $250,000 in Ziddu, a cloud service platform.

Uboweja added, “Startup investing has emerged as a new asset class for high net individuals over the last 10 years. Even though this involves higher investment risk, it’s suited for them as they can leverage both their brand equity as an endorser and cash investments as a financial investor to boost the potential of a successful high grosser backed by highly capable founders. The potential returns from a successful exit can be very high for them.”

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