What the Ratan Tata seal of approval means for startups in India

Ratan Tata remains a respected name in India, where several business tycoons are tarnished with the brush of crony capitalism. He retired at the end of 2012 after helming the Tata Group of companies which collectively had over US$100 billion in revenues. He’s credited with turning the Tatas from a family-run business to a professionally managed global entity after taking the reins in 1991, when India embarked on economic liberalization.

The benefits of that experience and reputation have been flowing to startups over the past couple of years, as Ratan Tata has taken to investing in entrepreneurs since his retirement. The latest to get his endorsement is Tracxn, founded in 2013 to track startups and give out analyst reports to various stakeholders in the ecosystem. Its founders Abhishek Goyal and Neha Singh were involved with startup discovery when they were with VC firms Accel and Sequoia. They felt a centralized, analytics-based approach would be more comprehensive compared to internal databases in VC firms. Today the Bangalore-based startup has 130 analysts tracking startups in 230 business segments globally – like a band of Sherlock Holmes ferreting out clues for investors.

Last year, Saif Partners invested US$3.5 million in Tracxn, which also got backing from Flipkart founders Sachin Bansal and Binny Bansal. But Tata coming on board as an investor has a special meaning. “To get an opportunity to build our startup under his mentorship is the best thing we could ask for [at the start of the new year],” says Abhishek Goyal.

See: Analyze this: Tracxn helps VCs with startup discovery, gets discovered by Saif Partners

The magic touch of Tata

Abhishek Goyal, Ratan Tata, and Neha Singh

Ratan Tata’s first startup investment was in Altaeros, which was founded at MIT to make high altitude wind turbines that would generate twice the energy of conventional ones. Since then, Tata’s turned his attention to Indian startups – Snapdeal, Paytm, Ola, UrbanLadder, and CarDekho are among the prominent ones.

There is no better advisor.

He then became the first Indian investor in Xiaomi, the Chinese smartphone maker that has taken India by storm. More recently, fashion startup Kaaryah, services marketplace UrbanClap, foodtech startup Holachef, and Dogspot got his backing as Tata spread his love wider. He’s also on the advisory board of three leading VC firms: Kalaari Capital, IDG Ventures, and Jungle Ventures.

It’s seen as a good omen now. “[Ratan] Tata is one of the most well-respected business leaders in the world. An investment by him is an affirmation of the strategy we have undertaken in India so far,” Lei Jun, founder and CEO of Xiaomi, said during last year’s announcement. Xiaomi had faced some unexpected hurdles when it first entered India. The Indian Air Force issued a caution on data going to servers in China. Things changed quickly for Xiaomi and Tata’s backing was icing on the cake.

Hugo Barra and Manu Jain of Xiaomi with Ratan Tata

“There is no better advisor,” said Vijay Shekhar Sharma, founder and CEO of Alibaba-backed Paytm, back in March.