Alia is among a bunch of young Bollywood stars who have decided to put their money where the future is. Unlike an earlier generation which parked its funds in real estate or diversified into aspects of film-making (distribution, production houses or dubbing and SFX studios), the newer crop of actors prefers to explore the money-spinners of their times: startups and e-commerce businesses.
Shilpa Shetty Kundra has, for instance, invested in a mother and baby care startup that offers organic products; Hrithik Roshan has partnered with a well-known fashion portal and a leading online fitness brand; Jacqueline Fernandez has acquired a stake in a cold-pressed juice company; Malaika Arora has seed-funded a chain of yoga studios for women; and Sushant Singh Rajput has co-founded a venture that will set aside a corpus of Rs 20 crore to fund startups established by women entrepreneurs, under the aegis of Niti Aayog’s women entrepreneurship platform. Quite naturally, entrepreneurs, keen to get them to sign on the dotted line, are queuing up.
“Stardom is like gold dust. Everyone wants to monetise every aspect of it,” says Afsar Zaidi, Founder of Exceed Entertainment, an agency that manages a host of Bollywood stars, and is also a partner with Hrithik Roshan in HRX.
Brand consultant Kiran Khalap, who heads chlorophyll, agrees. “For lesserknown startups, it’s a big asset to have a star on board. It provides both internal teams and external stakeholders a huge boost. And it is a shortcut to attracting attention in the market.” Bhatt’s presence appears to have provided the website an extra gear.
“We had a good four-year run before Alia came onboard, but the pan-India reach she’s brought is great. We had a presence in all the metros, but now we are shipping to almost 50 cities,” says Walavalkar, who claims a 130 per cent jump in sales in the second quarter of this year as compared to 2017.
For Malaika Arora, who has decided to back Diva, an upcoming chain of yoga studios for women, it’s about doing something beyond what she already does. “Acting has a shelf life, and you’ve got to move on and find a Plan B. I’m a mom, I need to be thinking ahead,” she says. “We’re in a business where, over the years, we’ve been able to build up a brand. You have a certain standing, and a certain following. You’d be foolish not to capitalise on that. It’s also a question of legacy — I don’t want to be forgotten and pass into oblivion. I want to be able to leave something worthwhile for my child.” Arora’s certainly picked her partners carefully enough for that. Diva is a tie-up with Zorba, a Bangalore-based yoga chain, and the Talwalkars group. The first few studios will open across the country this year.
Actor Hrithik Roshan, who launched his fashion and fitness offering HRX in 2012, in a 70:30 partnership with Exceed Entertainment -— the agency also manages his film commitments — claims that in the last few years the company has done exceedingly well.
There are three verticals under the HRX umbrella: an online athleisure and fashion offering, in which the Flipkartowned Myntra has invested 51 per cent; a Rs 300-crore equity-driven partnership with the Bangalore-based fitness firm Curefit; and, most recently, a licensing deal with Chinese mobile behemoth Xiaomi relating to wearable tech.
“We’re going to close at Rs 250 crore revenues this year for the apparel vertical, and we expect the Curefit tieup to be worth about Rs 200-250 crore by the end of this year,” says Roshan.
Curefit, which runs a chain of Cult gyms in Bangalore offers, among other things, a workout routine curated by Roshan himself. HRX, Roshan says, is looking to touch the Rs 500-crore mark in revenues by 2020. “We are doing all we can in this space, but HRX has wings of its own,” says Hrithik. “We are now expanding the Myntra partnership to start with five offline stores across India (the first one will open next month), and also introduce new categories of products.”
An accidental investor from the film industry actually began as a loyal consumer of the brand she went on to back. Actor Jacqueline Fernandez had been a fan of cold-pressed juice brand Raw Pressery and had offered CEO Anuj Rakyan several pointers over the years after meeting him through a mutual friend.
“She’s full of ideas and told me that she wanted to start a similar business but hadn’t managed to find time,” says Rakyan. So when Rakyan was looking for an influencer to promote his brand, Fernandez seemed the obvious choice.
When the actor was approached in April 2017, her team conducted a due diligence of the brand and decided to invest Rs 3.5 crore as equity. “I have not formulated a rigid investment philosophy yet,” says Fernandez. “But I do try and make sure that a few things are in place. First, I have to really believe in the brand and its products. Second, the quality of the team matters, and third, I obviously have to believe that the brand will be valuable over a medium-to-long term horizon.”
Fernandez says she gets approached by startups and brick-and-mortar companies across sectors and categories to join them, but she’s been cautious about the offers. “I jump in only when I feel that there is a combination of sustainable growth in the business idea and a superb founding team.” Fernandez has her hands full, having invested in two more startups: a Mumbai restaurant with a friend, and an active-wear brand, which will launch next month.
Another actor who went equity shopping in April is Shilpa Shetty Kundra. Shetty-Kundra invested $250,000 (Rs 1.6 crore) in Mamaearth, which offers natural, toxinfree mother and baby care products. She was first approached by the Delhi-based firm in June 2017 to become its brand ambassador, but bought in after trying out the products. “Whatever I attach my name to, must be an extension of my personality,” says Shetty. Once she was convinced, Shetty told founders Varun and Gazal Alagh that she wanted to invest in the company as well. Shetty has already begun helping the brand secure shelf space using her connections, and has helped extend the brand’s presence to over 300 stores across the country.
It’s not just about funding. The newer crop of stars take a keen interest in their investment, offering ideas for growth. Roshan says he sits for meetings with the entire HRX team at least once a week. “It’s not a business for hire. We’re trying to build something good that goes far beyond the business.” On her part, Arora admits to being consumed, pre-launch, about the training of the instructors, the number of members Diva will draw, even the colour of the walls of the various studios. “It’s not an endorsement,” she says. “I want to be actively involved in the project from its conception, to its birth, to the rollout.”
What Rakyan truly values about Fernandez’s involvement, are the consumer inputs he gets from his celebrity investor. “She told me that turmeric is really in and we should do something with it and we came up with turmeric shots — a drink comprising turmeric, coconut milk and banana,” he says, adding that the actress volunteers to test most of their products before they hit the shelves. Shetty’s inputs for her startup went beyond product innovation and she felt the firm didn’t need to invest much in marketing. Like in any investment, Shetty expects returns and feels the RoI may come in two or three years. But if they don’t, “one can’t be sentimental about it”.
“I have attached my name to businesses in the past which haven’t worked. You have to put your heart and soul in it and then, if it doesn’t work out, you move on.” It’s understandable that startups and young businesses would only be too happy to have stars on board as investors, but what’s in it for the actors themselves? “This is just one more thing in their investment portfolio,” says Khalap. “In the long term, equity as an asset will outperform all other assets like real estate, gold and such. The stars are making pots of money, so they invest in partnerships [with domain experts] at distributed risk.
Also, the ventures the newer stars are investing in are all early-stage, where the founders may be willing to give away a substantial stake in the company.” Assetlight e-tailers also have a higher chance of succeeding since, unlike traditional companies, they’re not plagued by problems around what Khalap calls the ‘3 Ls’ — land, labour and legal — provided they have a sound business model.