Mumbai: A little over ₹ 20 crore. That’s how much Ratan Naval Tata, chairman emeritus of Tata Sons Ltd, the holding company that controls the Tata group, has pumped into 10 Indian start-ups over the last 18 months.

His latest investment, in Bengaluru-based Actoserba Active Wholesale Pvt. Ltd, owner of online lingerie store Zivame, is, at ₹ 10 lakh, his smallest yet.

Ratan Tata and his office didn’t respond to an email seeking comment.

The modest ticket size of the Zivame deal isn’t out of the ordinary for Tata in his recent avatar as start-up champion. His largest known investment so far is ₹ 10 crore ($1.5 million) in Snapdeal, the e-commerce marketplace owned by Delhi-based Jasper Infotech Pvt. Ltd.

But it isn’t the ticket size that’s unusual. It’s the stage at which Tata has chosen to place his bets.

In the start-up universe, a ₹ 10 lakh cheque or even ₹ 10 crore, is more common for younger companies, typically those at the angel or seed stages. Tata’s portfolio is populated with companies that are well beyond those stages, and several are already heavily capitalized.

Take Snapdeal, for instance. Tata invested ₹ 10 crore in the company in August last year as part of a growth funding round, dubbed the Series F round, according to documents filed with the registrar of companies (RoC). Snapdeal raised around ₹ 620 crore in that round from an investor consortium including Temasek, Premji Invest and Tybourne Capital.

More recently, in May, he participated in taxi aggregator Ola’s Series G funding, also a growth round, investing a modest ₹ 95 lakh. ANI Technologies Pvt. Ltd, the company that owns Ola, raised a total of ₹ 2,519.9 crore in the Series G round from an investor group led by DST Global, Russian billionaire Yuri Milner’s investment firm.

Zivame is an earlier-stage company compared with Snapdeal and Ola. Tata’s ₹ 10 lakh investment is part of the ₹ 250 crore Series C or third funding round the company raised this month. The round was led by Mumbai private equity firm Zodius Capital. “The capital is incidental. What’s far more valuable for us is the experience and credibility he brings on board," said Zivame founder and CEO Richa Kar, while declining comment on the specifics of the investment.

Anurag Srivastava, founder of Singapore-based venture capital (VC) firm Jungles Ventures, agrees with Kar. “There are a lot of people in the US who take stakes in start-ups in exchange for advice and support, without investing any capital. The capital that he (Tata) puts in is actually a demonstration of a deeper level of commitment," he says. Jungle Ventures is one of three VC firms that Tata advises. The other two are Kalaari Capital and IDG Ventures India, both based in Bengaluru.

In all, Tata has invested in 16 companies so far. Among the 14 that constitute the India portfolio—out of which investment data is currently available for 10—three are unicorns, a term used by venture capitalists for unlisted companies valued at over $1 billion. These are Snapdeal, Ola, and Paytm, the payments platform owned by One97 Communications Pvt. Ltd. Five have raised at least two rounds of institutional capital from VC firms.

Clearly, capital is not the draw for entrepreneurs. So, what does the former chairman of India’s largest business conglomerate bring to the table?

Let’s talk about the elephant in the room—valuations.

Almost every start-up that Tata has invested in over the past 18 months has seen a significant jump in valuations. That may or may not be a direct consequence of Tata buying into them, but the numbers nonetheless tell an interesting story.

We begin with Bengaluru-based furniture etailer Urban Ladder Home Decor Solutions Pvt. Ltd. Between October 2013 and March 2015, the company has seen the value of its shares vault nearly 500%. The first spike occurred in June 2014, when Tata, along with other investors, bought 1,270 preference shares at ₹ 9,873 a share. Nine months later, when the company again raised fresh funding in a Series D round, the value of its shares had jumped to ₹ 15,140 a share.

“Having Mr. Tata on board does impact valuations favourably to a limited extent, but ultimately valuations are driven by business metrics," said Ashish Goel, founder and CEO at Urban Ladder. He declined comment on the specifics of Tata’s investment. The company reported a loss of ₹ 7.6 crore on revenues of ₹ 11 crore for the financial year ended March 2014.

When jewellery etailer BlueStone Jewellery and Lifestyle Pvt. Ltd raised its Series C funding round this July, it issued shares at ₹ 575.6 apiece, up more than 50% from August last year when Tata invested ₹ 3 crore in its Series B round. Gurgaon-based Kaaryah Lifestyle Solutions Pvt Ltd, an e-commerce company that sells women’s wear, has seen the most spectacular jump in valuations—up more than 500% since its first funding round. The company first raised a ₹ 23 lakh angel round in March 2014 at ₹ 10 a share. A little over a year later, Tata made a ₹ 25 lakh investment at ₹ 49 a share. About three months later, the company raised ₹ 1 crore from other investors at ₹ 65 a share. Incidentally, Kaaryah is the only seed investment so far in the portfolio. Nidhi Agarwal, the company’s founder and CEO, declined comment on investment specifics.

It isn’t just smaller companies that have experienced a spike in valuations. Ola, which is currently in the middle of a fresh funding round, dubbed Series H, has seen the value of its shares jump more than 85% soon after Tata invested in the company. It recently raised ₹ 1,478.2 crore as part of its ongoing Series H round at ₹ 29.44 lakh a share, against the ₹ 15.87 a share that Tata and other investors paid in April. Ola did not respond to emailed queries from Mint.

Another interesting point to note is that Tata himself doesn’t mind paying top dollar for his investments. In the case of Zivame, while Zodius invested in Series C1 paying ₹ 5,014 per share, Tata has paid ₹ 7,020 per share for his Series C2 investment.

Ash Lilani, founder and managing partner at Bengaluru-based venture capital firm Saama Capital, brushes aside the valuation argument. “Tata’s investment is an endorsement of the company but he doesn’t own enough shares to sway valuations. Also, most investors, whether VC, private equity firms or hedge funds, will collectively pay what the company is worth," he says. Saama is an investor in three of the 14 Indian companies in Tata’s portfolio—Snapdeal, BlueStone and Paytm.

Lilani makes a fair point. Tata does own very little in most of the companies in his portfolio. For instance, he picked up just six preference shares in Ola. Similarly, the investment in CarDekho was in lieu of 163 shares, while Snapdeal got him 237 shares.

The most number of shares he owns is two million in healthcare start-up Swasth India Services Pvt. Ltd, his first investment in India.

Still, the sharp upswing in valuations, as the accompanying graphic shows, almost consistently across the portfolio, is hard to ignore.

Of course, there’s also the obvious strategic value that Tata brings to the table. From most accounts, he plays the role of mentor, whether as an advisor to VC firms, or as stakeholder in start-ups. “He was clear from the beginning that he would only mentor, suggest and discuss," says BlueStone founder and CEO Gaurav Singh Kushwaha, who has met him once since the investment.

Even mentoring may not be as easy going forward as the portfolio gets bigger. And, lately, the pace of investments has quickened—he’s already closed 10 deals this year. According to Sudhir Sethi, chairman of IDG Ventures India, after Zivame, he’s committed to investing in one more company in the firm’s portfolio. Jungle Ventures’ Srivastava says he is on the verge of investing in three companies in its portfolio. That will take his total portfolio to 20.

While there may be some ambiguity on Tata’s long-term plans for the start-up universe, we do know a few things. He isn’t playing the role of angel investor. He isn’t trying to be a venture capitalist either. At least not yet. RNT Associates, the entity through which he invests, deploys his personal capital.

And, he certainly makes more than a marginal difference to valuations.

Ashna Ambre contributed to this story.

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