Bollywood Wants A Slice Of Deal Street Action

Cut to the present day, and the picture is very different, thanks to young film stars rewriting the script. Looking beyond their profession, which depends heavily on the unpredictable box office, these stars are today seeking to cash in on opportunities that will help them stay relevant regardless of how their films perform.

Movie stars, including the likes of Deepika Padukone, Katrina Kaif, Alia Bhatt, Priyanka Chopra, Ayushmann Khurrana. Akshay Kumar and Rana Daggubati, have been putting their name and fame to good use beyond film projects. In particular, they have been investing in corporates, particularly startups, fully conscious of their brand power, image and positioning. While no exact figures are released, the actors are known to spend anywhere between ₹50 lakh and ₹5 crore on such investments, for a stake of 0.25-.0.5%.

Where they’re investing

Padukone leads the pack of young actor-investors, having provided funding to yoghurt brand Epigamia, ed-tech start-up Front Row, electric taxi startup Blu Smart, digital pet care platform Supertails and space tech start-up Bellatrix Aerospace.

The emerging, and in many cases, established entrepreneurial side of new-age movie celebrities has manifested itself in several examples in the past few weeks alone. Earlier this month, Anushka Sharma joined millet-based startup Wholsum Food as an investor, brand ambassador and advocate for its flagship brand Slurrp Farm. “I’ve always believed you are what you eat… It’s a realization that hit home even harder after I became a mother. I want my daughter to develop a healthy relationship with food and I have to start her on that journey early on. Wholsum Foods was started by two mothers and their mission to unjunk the plates of kids and families across the world resonates with me strongly,” Sharma said, when her involvement with the company was announced.

In February, Sharma along with her cricketer husband Virat Kohli had invested in plant-based meat brand Blue Tribe, which they will also endorse, joining a growing number of celebrities investing in alternative businesses.

Sharma and Kohli were close on the heels of Bollywood couple Genelia and Riteish Deshmukh, who had announced an entrepreneurial venture focused on plant-based meat products, through their company Imagine Meats, in 2020.

Also, this month, Curefoods, a cloud kitchen company housing brands such as EatFit, Frozen Bottle, CakeZone, and Great Indian Khichdi, said it had secured funding from actor Varun Dhawan and formed a long-term association with him, making him brand ambassador for EatFit, the company’s largest brand.

Wellbeing Nutrition, a plant-based whole food nutrition company, announced that actor Rakul Preet Singh was an investor. Explaining her investment, she said: “I admire the founder’s vision of providing wellness solutions especially for hectic modern lifestyles. My belief in their products is what drove my investment into the company.”

Meanwhile Rana Daggubati and creator-led live entertainment commerce platform Roposo have announced the launch of a men’s grooming brand, DCRAF.

Beyond the box office

The uncertainty of the box-office and life are going to be a constant, as the pandemic has taught us. But the smartest people, not just movie celebrities, always figure a way to automate incomes, to crack a plan for wealth creation that is not dependent on their time or input,” says Vijay Singh, chief executive officer of Sony Entertainment Talent Ventures India (SETVI), a joint venture between Sony Music Entertainment and Sony Pictures Entertainment. SETVI was launched this February to offer actors, musicians, sportspersons, gamers and content creators in India opportunities for co-ventures, metaverse solutions, brand partnerships and management.

The investing landscape has also changed dramatically, with options that can be potentially far more rewarding in terms of value, beyond stocks, fixed deposits, mutual funds and real estate. Venture opportunities fit into that seamlessly and tick multiple boxes for stars with the additional potential of adding to their celebrity brand value , says Singh.

He cites the example of American actor Jessica Alba, who was inspired by the birth of her child and the memories of her own difficult history with childhood illnesses to launch The Honest Company, a consumer goods outfit that provides alternatives to the prevalent baby products. Another Hollywood star, Ryan Reynolds, had invested in spirits brand Aviation American Gin, which was bought by Diageo for $610 million in 2020.

The start-up opportunity

When 2020 arrived, bringing tough times for most industries, Bollywood was one of the worst hit, says Shrenik Gandhi, co-founder and CEO of digital agency White Rivers Media. “In comparison, the Indian start-up industry was moving up an incline that was propped up by several favourable policies and large corporate FDIs. Movie stars, being a group of highly networked HNIs, were drawn to brands, ideas, and initiatives that could benefit from their net value and return the benefit after a certain amount of amplification. This meant going beyond endorsements and investing in the start-ups they believed in,” Gandhi explains.

India, as a country, has seen a massive boom in its entrepreneurial journey, with numerous emerging brands and plenty of venture funding available, so it’s all about catching an economy on the rise, says Vijay Subramaniam, group CEO and co-founder of talent management agency Collective Artists Network, formerly known as KWAN. “It’s an opportunity that has presented itself,” he adds.

Celebrity investments are not exactly new. Cricketers Sachin Tendulkar and Sourav Ganguly have been restaurateurs for the longest time, while others, including actors Suniel Shetty and Mithun Chakraborty, own diverse businesses, says Himanshu Arora, co-founder of digital marketing agency Social Panga.

“In the recent past, with the start-up ecosystem maturing, celebrity investments have become a lot more structured and garnered the desired attention. The venture capital industry has traditionally been controlled by individuals with finance and tech backgrounds, but with time, movie celebrities and sports personalities are also investing, as it’s a lucrative and fast-growing market,” adds Arora.

Celebrities who earlier invested in restaurants, gyms, or real estate now look at start-ups as the go-to investment option, says Deep Mehta, co-founder of Mumbai-based digital marketing agency DigiChefs. “And it’s simply for two reasons: the opportunity in the start-up space and the noise associated with investing in them,” he says.

“With the kind of valuations start-ups get these days, celebrities know (there are) unicorns coming up every week and start-ups going public. One smart investment will be enough to make adequate chatter and result in monetary benefits for them,” Mehta explains. For instance, Alia Bhatt and Katrina Kaif saw their investments surge ten-fold when online cosmetics company Nykaa listed on 10 November — Bhatt had invested ₹4.95 crore in Nykaa parent FSN E-Commerce Ventures in 2020 and Kaif had put in ₹2.04 crore in a joint venture called Nykaa-KK Beauty in 2018, according to some reports.

“The opportunity for returns in the Venture investment space, coupled with the sexiness of being a start-up investor and the noise associated with it, is enough to attract these celebrities,” adds Mehta.

Apart from their money, the celebrities also bring their social following, face value, personality and mass appeal to the table. How they choose businesses to invest in, however, is largely a function of the deal in question, matched with the perception they have built in people’s minds.

“Such investments bring the celebrities recognition on newer fronts, raises both funding and familiarity for brands, and in turn maximises the net value of the stake these celebrities hold in them,” says Gandhi.

Why they invest

Across age groups, stars are investing in ventures and brands for different reasons, says Gandhi. For some, it could be an extension of their personal brand, and for others, a purely commercial decision. “However, there is a general trend of investing in categories like FMCG, tech accessories, food delivery, ed-tech, dating apps, space tech, digital pet care, beauty and self-care, men’s grooming and so on,” he adds.

Where a celebrity would invest, or which brand they would partner with, depends on the celebrity, the brand, and the nature of the partnership. For example, for his home-grown fitness brand HRX, actor Hrithik Roshan has designed actual workouts in addition to being a part of every business move. “Since Hrithik is a benchmark in fitness and health, his involvement in both the business and marketing side of things benefits the brand immensely,” says Gandhi.

Similarly, Katrina Kaif’s investment in online beauty store Nykaa is also an expression of her confidence in the brand. “At the end of the day, this level of involvement, which is beyond being a brand ambassador, is reassuring for other investors and consumers. However, for early-stage ventures, a much more significant challenge exists in terms of existing competition and other entry barriers. As a result, they have to put more efforts into establishing themselves. So, naturally, celebrities need expertise when evaluating a potential investment in such early-stage ventures,” says Gandhi.

On the other hand, founders of businesses themselves are keen on bringing on board celebrities that add value to their brands. “For instance, when someone like MS Dhoni bats for Run Adam, a sports technology platform, he draws from his own experiences. As a result, he can explain how this brand solves many issues he faced in his sporting career. This communication from someone like Dhoni adds legitimacy to the brand story and helps win consumers’ trust,” says Gandhi.

Enter, the advisory firms

To be sure, celebrities are not expected to understand the nuances of the business ventures they invest in, and that’s where talent and advisory firms come in. There are a variety of investment structures available to celebrities, varying from pure play cash or money investments for equity to pure play sweat equity for performance metrics, including promotional days, time, and social media plus PR support. In some cases, the brand also pays for endorsements partly in cash and partly in equity or through some other hybrid arrangement, experts say.

Media experts say some celebrities are sector-agnostic and are happy to look at opportunities beyond their traditional areas of operation or interest. They are willing to look at high-growth, new age industries and spaces as long as this resonates with the relevant audience. “The first criteria would be a brand or company they identify with, which is a personality or value match in some way. When celebrities invest, they typically seek out creative products and services that are profitable and have the potential to grow. Most of the new-age celebrities are interested in beauty, fashion, and so on, which address the demands of the new generation,” says Mansi Jain, senior vice-president and general manager, Roposo.

Through Glance Collective, Roposo co-created EK, a home décor, furnishing and wellness accessories brand with film, television and web content producer Ekta Kapoor. With Rana Daggubati, the company launched men’s grooming brand DCRAF. Glance Collective is a joint venture between Glance, the lockscreen-based content provider as well as owner of Roposo, and Indian talent management agency Collective Artists Network.

To be sure, there is no annual revenue commitment as these are venture investments and value unlocking happens at the time of exit. However, the way forward is for celebrities and their teams to remain clued in on the investment landscape globally as well as locally.