Celebrity investors adding zing to startups
Instant credibility, userbase help such startups scale up operations swiftly and become unicorns, say startup founders
image for illustrative purpose
Celebrity investors not only bring in financial capital, but they also provide their ‘Brand Capital’ that conveys instant credibility to the startup they partner with. Furthermore, association with celebrity grants the startup, with a consumer product, access to instant user base of dedicated fans, coupled with wider media attention, especially among younger generations. - Dr Anu Gupta, co-founder, Kyt Ventures, tells Bizz Buz
Hyderabad: Recently, Better Nutrition, a D2C brand from agritech startup Greenday, was in news for raising an undisclosed amount from badminton player PV Sindhu. Such speculation or funding by celebrities or star players help startups scale up swiftly. When a celebrity endorses a startup, the entrepreneur gets access to their network and influence, accelerating the process to scale up, say founders.
According to the data available on public domain, as of December 2023, Indian celebrities are angel investors in more than 110 startups. Legendary cricketer Sachin Tendulkar have invested in online used-car retail platform Spinny and eight other startups while another cricketer Mahendra Singh Dhoni as the brand ambassador of Cars24 has picked equity in the autotech startup, besides seven others. Virat Kohli is an investor in Mobile Premier League, an online gaming platform, Shraddha Kapoor has invested in MyGlamm and five other startups, Shilpa Shetty has invested in seven startups, cricketer Shikar Dhawan has invested in investment platform Upstox, Amitabh Bachchan in six, Suniel Shetty in eight, and the list goes on.
“Celebrity investors not only bring in financial capital, but they also provide their ‘Brand Capital’ that conveys instant credibility to the startup they partner with. Furthermore, association with celebrity grants the startup, with a consumer product access, to instant user base of dedicated fans, coupled with wider media attention, especially among younger generations. These benefits are unparalleled by traditional investors who can only offer monetary investment,” Co-founder of Kyt Ventures, Dr Anu Gupta, told Bizz Buzz.
Down South, actor Rana Daggubati is one of the early investors known to hold a diverse investment portfolio. From gaming platform, Gamezop to coffee brand, VS Mani & CO, from skincare brand Pulp, to his recent investment this year being Ghost Kitchens, Daggubati tops the list of active angel investors. Samantha Ruth Prabhu follows with her investments in ecommerce marketplace, SustainKart and super food brand, Nourish You.
Founder and CEO of Hyderabad-based Sarrthy Chetana Bhattacharya highlights that gaining investment from celebrities is not just about the funds they put in, as there is more value they bring to the table. She said: “The biggest value is endorsement that translates into sales skyrocketing. In recent times, many celeb-backed startups have turned unicorns. A celebrity’s funding also draws attention of potential partners, and investors, who find the startup attractive for investments.”
A celebrity’s investment, either on lines of funds or (picking equity for) endorsement, is a win-win situation for the brand.
“Since eternity we have been using celebrities for brand endorsements. It is a level-up when the celebrities themselves invest. It not only makes the brand authentic in the eyes of their fans, but also gives a marketing edge. For instance, Virat Kohli for one8 commune, Katrina Kaif for Nykaa,” said Payal Jain, Founder of Shark Tank-featured startup Funngro.
Celebrities identify with a product before zeroing down on their investment portfolio, a segment of founders believe. The other well-known opinion is that one post on social media from that celebrity can create the buzz around the brand’s image.
Contrary to this belief, few founders believe that in the absence of a meaningful fit, the whole exercise can come off as gimmick, and in fact damage the brand rather than enhancing it.
“There is nothing like a celebrity enhancing your brand, especially for a startup that seeks a quick lift, and has the means and money to do it, of course. But the celeb persona and product or sector fitment is everything. Hence, this decision must be taken with deep strategic, and conscious thought,” concludes TEDx speaker and Founder of copylove, Gunjan Pai.
