Ratan Tata signs up with Kalaari Capital in advisory role
1 min read . Updated: 09 Feb 2015, 11:49 PM IST
PremiumTata will provide guidance to Kalaari Capital's portfolio companies
Bengaluru: Kalaari Capital said former Tata Group chairman Ratan Tata has signed up with the venture capital firm in an advisory role to provide guidance to its portfolio companies.
Tata, who stepped down from the Tata Group chairmanship in December 2012, has made personal investments in four e-commerce companies including Snapdeal, Urban Ladder and Bluestone over the past six to eight months.
“We are pleased to join hands with Mr Tata and believe this collaboration will take us further towards creating leaders and great companies from India," Kalaari Capital managing director Vani Kola said.
Kalaari Capital, which is in the process of raising its next fund, has investments in more than 15 companies including Snapdeal, lingerie retailer Zivame and online furniture seller Urban Ladder.
The venture capital firm also picked up a small stake in Flipkart Ltd when India’s largest e-commerce company bought Myntra last May. Kalaari was one of the early investors in Myntra.
Tata is one of the few industrialists to bet on India’s fast-growing e-commerce business, which attracted more than $4 billion in capital last year. Fuelled by this flood of capital, valuations of several e-commerce companies have jumped over the past year.
“Valuation is a new thing to me so I’m still learning about it. What I look at while investing in start-ups is the quality and intelligence of the entrepreneurs. That is what I have based my current investments on," Tata said.
Tata’s growing interest in e-commerce firms comes in the backdrop of the impending online entry of several of India’ large conglomerates including his namesake company, Reliance and Aditya Birla Group.
These business groups have formed e-commerce teams over the past year as they seek to take a slice of the online retail, the growth of which has hurt their respective retail businesses.
India’s e-commerce market is expected to reach $6 billion in 2015, a 70% increase over 2014 revenue of $3.5 billion, according to technology researcher Gartner Inc.
E-commerce currently represents less than 4% of the total retail market though its share is increasing rapidly.
“They (conglomerates) can only be successful if they adopt the nimble and innovation-focused approach of start-ups. Otherwise it’s going to be very difficult for them to (compete)," Tata said.
