The Aditya Birla Group, one of India's largest conglomerates with revenue of nearly $40 billion, is setting up a dedicated fund for investing between $2 million and $10 million in disruptive ideas across the areas of financial services, healthcare
The Aditya Birla Group, one of India's largest conglomerates with revenue of nearly $40 billion, is setting up a dedicated fund for investing between $2 million and $10 million in disruptive ideas across the areas of financial services, healthcare and retail.
Umesh Adhikary, who is president of corporate strategy at Aditya Birla Management Corporation, will lead the group's startup-focused initiative to be announced in a few weeks, a person directly familiar with the matter said. "The money will come from Birla's family office," the person said. He said the group has already reached out to top venture capital executives to be a part of the initiative. Another executive said: "It's too early to talk about the size of the fund and other details." A spokesperson of the group did not respond to an email, sent last week, seeking comment.
Among India's top conglomerates, the Tata Group and Reliance Industries have already started looking at startups working on ideas that have the potential to disrupt current market dynamics in the areas of their business interests. Last year, Reliance partnered with Microsoft Ventures to start a startup accelerator, GenNext Innovation Hub.
Apart from Tata Group Chief Technology Officer Gopichand Katragadda, who has started tapping into the Bengaluru startup hub, the $100 billion group's chairman emeritus Ratan Tata himself has become a one-man VC firm. Tata has already invested in around a dozen startups over 12 months, including Xiaomi, the world's second most valuable startup after Uber. Rishikesha Krishnan, director and professor of strategy at IIM-Indore, said the move underscored a realisation by these conglomerates that there's value being created outside. "New industries are being created, and the ultimate route they have is to become an investor," said Krishnan.
However, as these conglomerates tap into the disruptive world of startups, they face challenges. "It's not like an Alibaba, which backs Paytm with the required understanding. Startups are also looking beyond just money while choosing an investor," he added.
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