India is witnessing the amalgamation of the world’s third-largest tech start-up ecosystem in the world and the third-largest film industry – setting about the trend of Angel Ambassadors.
Aishwarya Rai became the latest angel ambassador in India’s thriving start-up ecosystem, investing in Bengaluru-based environmental intelligence IoT start-up Ambee. What she continues is a growing trend of celebrities turning into an entrepreneur.
Indian celebrities and start-up ecosystem are arguably taking a cue from the world’s biggest such ecosystem in Silicon Valley. The US start-up ecosystems have witnessed mounting investments from Hollywood stars and celebrities like Ashton Kutcher, Snoop Dogg, Nas, Jay-Z, and Justin Timberlake among others.
In India, the third-largest tech startup ecosystem in the world and the third-largest film industry in the world are undergoing similar amalgamation. Bollywood stars and celebrities are exploring opportunities to invest and diversify their interests. The fan following and reach in the market, that comes with stardom, works are fuel for entrepreneurial ambitions.
Angel Ambassadors fueling the trend
Recent investors include Deepika Padukone, Amitabh Bachchan, Aamir Khan, and Shilpa Shetty. Global actress Priyanka Chopra has interests in two US-based startups — alternate education start-up Holberton School and dating app Bumble.
Malaika Arora heads the investors for Mumbai-based fitness startup SARVA, which also has a star-studded international line up that includes music icon Jennifer Lopez, and US baseball star Alex Rodriguez. Akshay Kumar recently invested in a wearable tech startup, GOQii.
Hritik Roshan invested in fitness startup Cure.fit which also includes his personal training regime and him on the face to leverage his fan following. Aamir Khan invested $300K in furniture rental platform Furlenco. Jacqueline Fernandez invested in the parent of juice start-up Raw Pressery. John Abraham has a minority stake in a Mumbai-based chain of health, wellness start-up Guardian Healthcare.
Market confidence that comes with celebrity investment
The trend was arguably set about in India by star actor Shah Rukh Khan who was one of the first actors to turn into investors. Adman Prahlad Kakkar opined on Shah Rukh’s role in the trend, “His example made everybody realise even if he stops acting tomorrow, he will still be a multi-billionaire owing to the right investments. And stars will only invest in a domain that they understand.”
When Suniel Shetty invested in Pune-based online fitness community SQUATS, founder Jitendra Chouksey, said, “Suniel Shetty has continuously set new benchmarks in his acting career, business, and fitness. His success across domains is driven by the clarity of his vision. Even at 58, he is fitter than most people in their mid-20s. This coming together of mutual synergies is a testament to the strength of the SQUATS’ result-oriented approach to fitness.”
Arjun Kapoor has an investment in home food delivery company Foodcloud.in. He said at the time of his investment, “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.”
As ecosystem matures, the trend will continue to grow
The startup ecosystem in India is on the cusp of maturity. And this is seeing a surge in the trend of angel investments from celebrity circles. The maturity of business models will entice the biggest investments from high-profile public personalities.
Venture capitalist Prerna Bhutani explains, “Through these deals, most celebs are associating themselves with brands that resonate with their personas. Moreover, the stars get to participate in the upside that gets created as an outcome of their association, since they are equity holders. This is something that they are unable to do with established brands they endorse — the brands get all the benefit of association; the celeb just makes the fee.”
A similar explanation is expressed by Nitin Kanchan, CEO, Ka Enterprises, “Given the celebrity’s enormous influencing capability, at the initial stage itself , discussions result in a mutually acceptable strategy which ensures that the celebrity through the initiative is accepted as a ‘business accelerator’.”
Building credibility through perception transformation
Having a celebrity on board works in validating the concept of a young start-up and making it a brand. It instils credibility and a trust factor of success higher than from regular VCs or investors. And these investments are much bigger in the part they play.
When it’s in a consumer-focussed start-up, the halo effect from the angel ambassador is invaluable for the brand in building market presence and attracting customers.
Another thought that resonates with such endorsements is the perception of audience which believe stars have a bigger moral compass and only associate with brands they vouch for. Celebrity partnerships also give a boost to distribution demands and channel growth where retailers are more confident about stocking up products endorsed by a big name.