How Indian Startups Captured Tata's Attention Early On

Ratan Tata, Chairman Emeritus of Tata Sons, passed away on Wednesday, October 9, at the age of 86, according to a late-night statement released by the company. 

Tata, who ran the Tata Group’s charity trusts, was a philanthropist, a prolific investor, and a mentor to young businesses and startups. 

His foray into startup investment began in 2014 with a minority stake in the e-commerce platform Snapdeal when the startup industry was still in its early stages.

According to Tracxn data that AIM accessed, Tata has invested in nearly 54 startups in the past decade. He described these investments as a "learning experience" rather than merely financial aid. 

He made investments across diverse sectors, including fintech, e-commerce, healthcare, mobility, and cloud-based firms, all of which significantly impacted the Indian startup ecosystem. Prominent investments include Ola Electric, Paytm, and FirstCry, among others, which have achieved considerable success and got listed on the Indian stock exchange.

Among his investments, Tata’s notable stake was in AI startup Niki.ai, which was made in 2016, when artificial intelligence was beginning to emerge in India. The Bangalore-based AI startup, now defunct, was founded in 2015 by IIT Kharagpur alumni Sachin Jaiswal and three other co-founders. It offered a chatbot named Niki that allowed users to perform transactions through a chat interface that used NLP and machine learning technologies. 

In the same year, he backed One97 Communications, the parent company of Paytm. Tata didn't just give money; he also briefly became a business advisor for the company. 

In an interview, Tata indicated his shift from leading the Tata conglomerate to becoming an active investor in startups, bringing valuable insights—especially into the entrepreneurial mindset, the risks involved in startups, and the importance of domestic capital and government support in advancing innovation within India's startup ecosystem. 

The veteran businessman recently sold five per cent of his shares in Upstox and was said to have received a 23,000 per cent return on his initial investment. He also received returns of Rs 2.96 crore or 448.9 per cent through his IPO exit in FirstCry back in August of this year.

In 2021, Tata received a proposal from Shantanu Naidu, a design engineer at Tata Elxsi, to create collars for street dogs to prevent fatalities. The millennial, looking for funds for his idea, wrote a letter to Tata. Within two months, he got a response asking Naidu to work with him. It led to a close friendship and Bonding over the love for animals; Tata went on to help Naidu with his startup ‘Motopaw’ which created collars for stray dogs. Later, he invested in Naidu’s other venture, Goodfellows, which supports senior citizens.