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Indian startups who leverage celebrity associations have an edge: Experts

The brand value of a celebrity, if leveraged well, can take the brand value of a startup northwards

October 05, 2018 / 07:52 PM IST
Despite the COVID-19 pandemic, this year has seen active fundraising in the startup space, where e-learning and online food ordering firms nabbed a majority of the big bags – six and three respectively. Here is a look at the top 10 startup deals in India in terms of capital till September 2020, according to Venture Intelligence (Image: Moneycontrol)

Despite the COVID-19 pandemic, this year has seen active fundraising in the startup space, where e-learning and online food ordering firms nabbed a majority of the big bags – six and three respectively. Here is a look at the top 10 startup deals in India in terms of capital till September 2020, according to Venture Intelligence (Image: Moneycontrol)

Ashton Kutcher, Carmelo Anthony, Nas and Leonardo DiCaprio have done it in the West. Amitabh Bachchan, Yuvraj Singh, Sushant Singh Rajput and now Priyanka Chopra are doing it in India — investing in startups.

Indian celebrities are loosening their purse strings to invest in startups or starting funds of their own and an initial report card on these investments show that the ventures have all done well.

“The brand value of a celebrity, if leveraged well, can take the brand value of the startup in which he or she is investing northwards. But one has to know how to exploit the celebrity involvement, otherwise this new-found trend will be reduced to being one of the avenues where the UHNIs (ultra high net worth individuals) are investing,” Harish HV, a former partner at professional services firm Grant Thornton.

An interesting observation by Adhvith Dhuddu, CEO at digital marketing platform AliveNow who is also an investor in Mexican restaurant chain California Burrito, is how celebrity investments go only to B2C platforms and never to B2B companies. “Celebrity investments work best where brands target end users because they are also the target audience of the celebrity. So 90 percent of the investments will go to food chains, retail brands etc, but not to something like a logistic chain,” Dhuddu said.

But how does it work for the celebrities? “If we notice the trend, the celebrities who invest in startups are either sportspersons or from the glamour world where the career span is shorter than any other profession. It is a sort of future planning,” said Dhuddu.

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Experts also say to get celebrities on board as investors is a smart way to pay them for lending their brand value to the company. “Amitabh Bachchan’s involvement with Just Dial is a classic example of a company not paying a star by cash for his endorsement, but getting him on board by giving him stakes. This saves the company the huge cost of having a celebrity endorser and gives the brand its visibility too,” Dhuddu explained.

Priyanka Chopra is the latest addition to the string of celebrities — taking up a stake in tech startup Holberton School, a coding education company, as well as dating and social media app Bumble.
Tasmayee Laha Roy

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